Bankruptcy Schedule G -- Contracts and Leases
When you file for bankruptcy, if you have contracts or leases (like car leases or rental contracts) you must list them on Schedule G.
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ALERT: As part of a multi-year court project to modernize the Official Bankruptcy Forms and make them more consumer-friendly, the Advisory Committee on Bankruptcy Rules has recently revised most of the consumer bankruptcy forms (several had already been revised in 2013 and 2014). The changes became effective on December 1, 2015. The revisions involved reformatting, renaming, and renumbering the forms, and in a few instances, combining two forms into one. You can find the new forms here: www.uscourts.gov/forms/bankruptcy-forms. We are in the process of revising all of our articles to comport with the new forms. Check back soon.
If you have an interest in any executory contracts or unexpired leases (such as car leases, rental agreements, and timeshare contracts) at the time you file for bankruptcy, you must list it on a form called Schedule G – Executory Contracts and Unexpired Leases. Read on to learn more about how to fill out Schedule G in your bankruptcy case.
For more information on what forms you must complete in bankruptcy, see our topic area on Completing the Bankruptcy Forms.
What Is an Executory Contract or Unexpired Lease?
An executory contract is a contract where both parties still have certain obligations to perform. Similarly, a lease is unexpired if the lease period and terms are still in effect. The following are some of the most common executory contracts and leases you might need to disclose on Schedule G:
- car leases
- rental agreements
- commercial or residential real property leases
- business or service contracts
- real estate sales contracts
- personal property leases
- license agreements, and
- timeshare contracts or leases
Why Must You List Executory Contracts and Unexpired Leases on Schedule G?
Schedule G provides the bankruptcy court with information regarding your ongoing contracts and leases. But in addition, it allows the bankruptcy trustee to determine whether your interest in an executory contract or unexpired lease can benefit your bankruptcy estate.
Similar to your other assets, your contract and lease interests are considered property of the bankruptcy estate. If the trustee believes that your interest will provide value to your bankruptcy estate, he or she may be able to assume (take over) that lease or contract.
In most cases, the trustee will not be interested in taking over your contracts or leases because they will not benefit the bankruptcy estate. But if you have a lease or contract that the trustee can use to realize a profit for your creditors, he or she may assume it.
Example. Jane has an agreement to lease commercial office space for 30 years at $1,000 per month. Shortly after Jane entered into the lease, the area around the office building experienced significant growth. As a result, the market rent for a similar office space in the building is now approximately $5,000 per month. Because the market value of the lease is significantly more than what Jane is paying, the trustee may be able to assign or otherwise use her lease to generate a significant amount of proceeds for the bankruptcy estate.
How to Fill Out Schedule G
Schedule G is a simple form with detailed instructions on what information you must provide. If you don’t have any executory contracts or unexpired leases, simply check the box that indicates you have no such interests. But if you have an interest in an executory contract or unexpired lease, you must list:
- the names and addresses of all the other parties to the lease or contract
- a description of the lease or contract
- the nature of your interest (such as lessor or seller)
- whether the lease is for nonresidential real property, and
- the contract number for any government contracts.
This article provides general information only. There are many legal issues involved and important decisions to be made when filing for bankruptcy. You must understand the entire bankruptcy process, learn about the applicable federal and state laws, and determine how those laws will affect your particular situation before you complete the bankruptcy forms. In many cases, it's best to consult with an experienced bankruptcy attorney. If you want to file bankruptcy without a lawyer, use a good do-it-yourself book like Nolo's How to File for Chapter 7 Bankruptcy to ensure you make well informed decisions about your bankruptcy case.