When filing a bankruptcy case, debtors must completely list all their debts on one of the schedules of debts that are filed with the bankruptcy court. Debtors must list or “schedule” their debts based on whether the debt is unsecured, secured, or a priority debt. Depending on the type of debt, it is listed on either Schedule D, E, or F.

A secured debt is a collateralized obligation, typically a sale of property where the subject property is of substantial value, and the creditor may recover it if the purchaser stops making payments. Examples of secured debts include:

• mortgages;
• home equity loans;
• motor vehicle loans;
• tax liens;
• judgment liens;
• mechanic’s or materialman’s liens; and
• loans for large appliances and electronics such as televisions.

Bankruptcy debtors must list:

• the amount of the debt;
• the creditor’s name and mailing address;
• the date of the debt;
• any applicable account number;
• whether the debt is contingent, liquidated, or disputed (consult with an experienced bankruptcy attorney to learn more about this)
• a description of the property that secures the underlying debt;
• the type of lien;
• the value of the collateral, and
• any of the portion of the debt that would be unsecured after subtracting the value of the collateral from the amount of the debt. If the debt is for $150,000 and the collateral is worth $80,000, then $70,000 of the debt is unsecured.

Secured debts are listed on a debtor’s Schedule “D” which is filed with the U.S. Bankruptcy Court. Morrison Law Group is readily available to help all bankruptcy debtors prepare all their bankruptcy documents correctly and completely.

As mentioned, debtors must list their debts based on whether the debt is unsecured, secured, or a priority debt, the latter as designated by federal bankruptcy law. An unsecured debt is an obligation that is not collateralized by a lien on specific assets of the debtor/borrower.

In the case of an unsecured debt, there is no collateral for the debt, although there is an existing legal obligation to repay it. Any failure to make payments on an unsecured debt will not result in the creditor taking any property as a secured creditor would take it. An unsecured creditor must file a court action and successfully obtain a judgment before taking the property. Once it receives a judgment, a creditor may garnish a bank account or wages, or attach real or personal property. Examples of unsecured debts include:

• credit card accounts;
• student loans;
• utility bills;
• medical bills;
• personal loans;
• court judgments; and
• past due rent.

To a great extent, bankruptcy offers a choice. Prospective debtors who meet the eligibility requirements for filing under both Chapter 13 and Chapter 7 may choose under which chapter to file. Enlisting the expertise of one of the seasoned bankruptcy attorneys at the Morrison Law Group will provide all the knowledge necessary to help anyone make the best choice based on his or her financial circumstances. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.