As with any legal proceeding, there are many forms and documents involved when you file bankruptcy. Everything that you submit to the court helps them to assess your overall situation so that your case is handled correctly. The court will need to see documents demonstrating your financial situation for the six months leading up to bankruptcy, including any contracts or leases you are a part of. I’ll walk you through “Schedule G – Executors Contracts and Unexpired Leases,” where we’ll include this information.
Completing the Form
The court needs to know about your contracts and leases since these are financial agreements that are binding until the lease expires or the contract is ended or broken. I’ll give you a list of possibilities, but this includes car, residential rental, or equipment leases, as well as contracts for services, time-shares, business agreements, or real estate sales.
In addition to listing the leases, you’ll need to include the names, contact information, and responsibilities for everyone involved in the agreement. There will be space for you to describe the lease or contract and list the start and end dates and contract number. We’ll use Schedule E/F or Schedule D if you owe payments on the lease or contract.
Will My Contract or Lease be Ended?
If you have outstanding leases or contracts when you file bankruptcy, they may be rejected (ended) or assumed (continued) by the court trustee, who has 60 days to make their decision. The trustee will look at the full lease or contract and consider the outcome of rejection or assumption for the creditors. For people who are filing a Chapter 7, most agreements do not result in generating income for their creditors, so they would be rejected. But, your lender may agree to allow you to assume a car lease as long as you are willing to work with them. If your lease payment is too high, it may be in your best interest for it to be rejected, but the trustee will make this decision. If the agreement is rejected, the debt is discharged through your Chapter 7.
The court trustee also decides what happens to outstanding leases and contracts in a Chapter 13. In most situations, the trustee rejects the lease or contract, and any outstanding debt is converted to unsecured debt. Each repayment plan is different, but many times, unsecured debt ends up not being paid at all in a Chapter 13.
Move Forward with Confidence
As you’re preparing to file bankruptcy, you’ll undoubtedly have many questions about what happens to your debt and property, including any financial agreements you are subject to. I’ll take the time to meet with you to discuss all aspects of your situation and answer any questions you might have so that you aren’t hit with any surprises along the way. I’ll ensure that your case is solid with complete paperwork and the necessary supporting documents so that you can move on with your life and rebuild your finances.