Consumer Bankruptcy Journal Fall 2015 - Page 53

REVISED BANKRUPTCY FORMS each category through the use of extensive checkboxes. The asset categories also are changed in the modernized schedule. Schedule C Modernized Schedule 106C addresses in-kind property exemptions by incorporating language suggested by the U.S. Supreme Court in Schwab v. Reilly, 560 U.S. 770 (2010). In Schwab v. Reilly, the Court held that a trustee is not required to object to a debtor’s exemptions in order to preserve his right to claim any value in the item that exceeds the value listed as exempt. In other words, when the debtor’s exemptions are within the statutory limits, the trustee is not required to object to preserve an argument that the asset is actually worth more than the debtor’s valuation. The Court also held that when property is undervalued at the time of the petition, or later appreciates in value, the benefit inures to the estate. In its opinion, the Court explained that a debtor who intends to exempt “the full market value of the asset or the asset itself” may put the trustee on notice by listing the exempt value of the asset on Schedule C as “full fair market value (FMV)” or “100% of FMV.” Of course, some courts have had a problem with this designation because by using this language a debtor is seeking to exempt property “in-kind” even though the applicable exemption is capped at a certain dollar amount. As originally drafted for comment, Schedule C included a checkbox for the “Full fair market value of the exempted property.” However, the Committee was concerned that the option would likely be found to be an impermissible designation under state exemption laws that cap exemptions to a dollar amount. Consequently, the proposed form contains two checkbox options under “Amount of the exemption you claim”: (1) a checkbox followed by a line with a dollar sign, and (2) a checkbox followed by “100% of fair market, up to any applicable statutory limit.” Schedule D Modernized Schedule D is divided into two parts. Creditors are listed in Part 1, and additional notice parties, for example, a collection agency or an attorney representing a creditor, are listed in Part 2. Checkboxes are added to describe the nature of the creditor’s lien. Schedule E/F Schedules E and F are combined into a single form for unsecured claims. Both priority and non-priority unsecured claims are reported in alphabetical order on the combined schedule, although priority claims are grouped separately from nonpriority unsecured claims. The proposal lists priority claims in Part 1 of the schedule, which includes four checkboxes for identifying the type of priority that applies to the claim. General National Association of Consumer Bankruptcy Attorneys Winter 2015 unsecured non-priority claims are listed in Part 2. The “consideration for claim” question would be eliminated, and the proposed form no longer asks if claims are subject to setoff. Additional notice parties are listed in Part 3. Schedule G Revised Schedule G i ́