When you file for bankruptcy, you must complete a packet of forms where you'll list your assets, debts, income, expenses, and financial transactions. On one of these forms, Schedule D: Creditors Who Have Claims Secured by Property, you'll provide information about your secured debts.
(To learn about the other forms you must file in Chapter 7 or Chapter 13 bankruptcy, see Completing the Bankruptcy Forms.)
A secured debt is a debt that is secured by property. If you don't repay the debt according to your contract—for example, you fail to make your monthly payment—the creditor has the right to take back the secured property, such as your home or car.
In contrast, your unsecured creditors don't have the same rights. For example, if you don't pay your credit card debt or medical bill, the creditor can't take back the video game you bought or undo the medical treatment you received. The creditor must sue you in court and obtain a judgment against you before it can begin collection proceedings.
Some common secured debts include:
On Schedule D, you must provide the following information:
Creditor information. You'll list the creditor's name and mailing address.
Ownership of debt. Here you'll indicate who is responsible for the debt. If someone else has to pay the loan too—called a codebtor—you'll include that person by checking the appropriate box. This might be a cosigner, a guarantor, or a former spouse with whom you jointly incurred the debt.
Date of the debt. You'll list the date you took out the loan.
Description of the Secured Property. You'll use the same property description you used on Schedule A/B: Property.
Contingent, unliquidated, or disputed. Here you'll 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).
Nature of the lien. You'll list whether the debt is secured as the result of an agreement you made (such as a mortgage or car loan), is statutory in nature (such as a tax or mechanic's lien), or is a judgment lien. If the lien is another type, you'll list it in the blank space provided.
Account number. You'll list the last four digits of the account number.
Amount of claim. You'll state how much you owe on the debt, even if you think the property securing the debt is worth less than what you owe.
Value of the collateral. Here, you'll indicate how much the property is worth if you were to buy it in today's marketplace.
Unsecured portion. You'll state any amount that 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: Creditors Who Have Claims Secured by Property. 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.