If you are reading about or researching Bankruptcy, you have no doubt run across the terms “Petition” and “Schedules.” What are they? Good question! The Bankruptcy Petition is the document that gets you in the door of the Courthouse and officially creates your Bankruptcy case. The minute the Petition is filed, the automatic stay is in place and you will have a case number. The Petition asks for basic information about you, including your name, prior names used, current address and social security number (which will be masked on the public records). It also asks what Chapter you are filing, an estimate of your debts and assets, and whether you have filed a previous case in the last eight years. It must be signed by the debtor, under penalty of perjury, and by the lawyer or petition preparer. You can see a copy of a Petition by clicking here.
The “Schedules” generally refer to the set of documents that have to be filed at the same time as the Petition or very shortly thereafter. They are much more detailed and require debtors to list real property, personal property, exemptions, the names and addresses of all secured and unsecured creditors, detailed income information and a detailed budget. The “Statement of Financial Affairs” requires, among other things, disclosure of income for the past three years, recent transfers to creditors or others, any interests you own in businesses, closed bank accounts and lawsuits. The Means Test documents are also part of the initial package. The complete set of Schedules and other required documents can easily exceed 40 pages even for a simple case. It is very important that these documents be completed fully and accurately, as debtors must sign them under penalty of perjury and certify they they are true and complete. You can see a list of these documents on the US Courts website, but keep in mind that all of these documents are not required in every case and the set of documents for a Chapter 7 case will be different than a Chapter 13 case.
Although many people believe these documents are merely fill-in-the-blank documents, and in a sense they are, it is very important that they be completed carefully. In many cases, I spend more time making sure the Schedules are correct than on any other matter in the case (other than attending court). If the Schedules are done properly and filed timely (usually within two weeks of the filing of the case) it makes the entire case go more smoothly. The case Trustee, creditors and sometimes the United States Trustee will review and rely on these documents, and any significant errors (such as failing to list real estate, bank accounts, etc.) will probably come to light at some point. If exemptions are not properly listed, a debtor may lose that property. That said, it is perfectly fine if a debtor has to amend the schedules because of an innocent oversight. Given the pressure that often comes with the filing of a case, it is normal to overlook a creditor and such things are normally an easy fix with an amendment. In my office, getting the Schedules completed and filed on time is a priority, so we make sure we work with clients to get them done. I personally review all Schedules that we file. We also remind clients that it is their responsibility to review every page to make sure they are correct, as we are relying on them to provide us with the information to include. This is one requirement that can be crossed off the list early so the case goes smoothly.