Are Unsecured, Nonpriority Debts (Schedule F Claims) Discharged in Chapter 7 Bankruptcy?
On one of those forms, called Schedule F, you must list all of your creditors that hold unsecured, nonpriority claims. These are debts that are not secured by any property
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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.
In Chapter 7 bankruptcy, you must fill out a large packet of forms listing your income, property, and debts. On one of those forms, called Schedule F, you must list all of your creditors that hold unsecured, nonpriority claims. These are debts that are not secured by any property (debts that are secured by property include your mortgage or car loan) and that don't get any special payment priority from the government.
For the most part, debts listed on Schedule F are discharged in a Chapter 7 bankruptcy, although there are a few exceptions.
How the Chapter 7 Bankruptcy Discharge Works
In Chapter 7 bankruptcy, most of your debts are discharged. In return, you must give up nonexempt property -- the bankruptcy trustee sells this property and uses the proceeds to pay your creditors. (To learn how this works, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?)
Schedule F Claims -- Nonpriority, Unsecured Debts
The debts you list on Schedule F are:
- nonpriority (priority debts include certain tax debts and child support arrearages), and
- unsecured (meaning no property serves as collateral for the debt -- to learn more about this see Secured v. Unsecured Debt).
Examples of nonpriority, unsecured debts include credit card debt, medical debt, personal loans, student loans, utility service arrearages, and the like.
Are Schedule F Claims Discharged?
Most debts you list on Schedule F will be discharged at the end of Chapter 7 bankruptcy. (Of course, some of those creditors may be paid in full or part during the bankruptcy if you have nonexempt property that the trustee sells.) Common types of debts that are discharged include: credit card debt, utility bills, medical debts, personal loans, and judgments from lawsuits.
However, there are some types of unsecured, nonpriority debt that are rarely or never discharged. Examples include:
- student loans (to learn more, see Student Loans in Bankruptcy: The Brunner Test)
- fines, penalties, or restitution imposed by a government as punishment
- court fees
- intoxicated driving debts, and
- homeowner's association fees assessed after you file for bankruptcy.
And remember, priority debts won't be listed on Schedule F. Many of these (such as child support, alimony, and recent tax debts) cannot be discharged in bankruptcy. These debts will be paid first if the trustee can get some money from your exempt property.