When you file for bankruptcy, you must complete a packet of forms listing your assets, debts, income, expenses, and financial transactions. One of these forms is Schedule D, on which you must provide information on your secured debts.
(To learn about the other forms you must file in Chapter 7 or Chapter 13 bankruptcy, see Completing the Bankruptcy Forms.)
What Is a Secured Debt?
A secured debt is a debt that is secured by property (called collateral, if you agreed to the secured debt). If you don't repay a secured debt, the creditor has the right to take back the property securing the debt. In contrast, if you don't repay an unsecured debt, such as credit card bills, the creditor can't simply take your property; it must sue you in court and obtain a judgment against you before it can begin collection proceedings.
Some common secured debts include:
- mortgages or deeds of trust
- judgment liens against your property (recorded by creditors who have won a lawsuit against you)
- mechanic's or materialman's liens, recorded against your property by contractors who claim they were not paid
- tax liens, and
- security agreements, such as a car loan for which your car serves as collateral.
Completing Schedule D
On Schedule D, you must provide the following information:
- Creditor information. List the creditor's name in the first column. Include the mailing address for the creditor, as well as the account number. If the original creditor has sent its claim to a collection agency, list both the original creditor and the collection agency here.
- Codebtors. If you have a codebtor on the secured loan, put a check in this column. This might include a cosigner, a guarantor, or a former spouse with whom you jointly incurred the debt.
- Ownership of debt. Here you indicate whether the the debt is owed solely by the husband (H), the wife (W), jointly by both as joint tenants, tenants in common, or tenants by the entirety (J), or jointly by both as community property (C).
- Loan information. List the date you took out the loan, the type of loan, and the property securing the loan. For example, you might list "December 31, 2012; first mortgage; house at 123 Main Street, Anytown, USA."
- Contingent, unliquidated, or disputed. You must indicate whether the debt is contingent (it depends on an event that has not yet occurred, such as someone else defaulting on a loan for which you cosigned); unliquidated (the exact amount hasn't been determined, such as might be the case if you've been sued for injuries you caused in a car accident); or disputed (you and the creditor disagree over the existence of amount of the debt).
- Amount of claim. List how much you owe on each debt, even if you think the property securing the debt is worth less than you owe.
- Unsecured portion. List any amount you owe that exceeds the replacement value of the property. For example, if you still owe $10,000 on a car that's worth only $7,000, the unsecured portion of the debt -- the part the creditor couldn't get back if it repossessed the car and sold it -- is $3,000.
Warning: This article provides general information about Schedule D. Before you complete this or any other bankruptcy form, you must understand bankruptcy law in its entirety and may need to know local customs in your bankruptcy court. Consult with a local bankruptcy attorney or read a comprehensive self-help book.