§ 36.11     Schedule D—Secured Claims
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 36.11, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

Schedule D to Official Bankruptcy Form 6 is a listing of all creditors holding secured claims. All secured debts should be listed whether the debtor intends to retain the collateral and make payments through the plan, pay the creditor directly, or surrender the collateral to a creditor. Debts secured by real and personal property are listed on the same schedule. The secured claim holder’s name and mailing address, including zip code, should be listed. The addresses indicated on Schedule D may be used by the court and by the Chapter 13 trustee for noticing and for mailing distribution checks.

[2]

Account numbers are important to enable creditors to identify the debtor and to properly file proofs of claim. Effective December 1, 2003, and consistent with the Privacy Policy adopted by the Judicial Conference of the United States,1 Schedule D requires the debtor to list only the last four digits of any account number for each secured claim. The instructions to Schedule D state that complete account numbers “is useful to the trustee and the creditor and may be supplied if the debtor chooses to do so.”

[3]

Detailed elsewhere,2 § 342 as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)3 defines “effective” notice under some circumstances to include “the current account number of the debtor.”4 Privacy concerns have created ambiguity in Schedule D with respect to listing complete account numbers. Choosing to list all digits of an account number enhances the likelihood that notices will be effective in the Chapter 13 case.

[4]

As detailed above, the instructions to Official Bankruptcy Form 6 indicate that creditors are to be listed in the schedules only one time each. A creditor with a lien or security interest should be listed in Schedule D notwithstanding that after claims splitting under § 506(a)5 the creditor may have no secured claim or may have both a secured and an unsecured claim. The instructions require listing creditors in alphabetical order to the extent practicable.6

[5]

Each secured debt should be described with the date it was incurred, the nature of the lien, a description of the collateral and a market value for the property subject to lien. All types of liens and security interests should be listed, including judgment liens, statutory liens, mortgages, deeds of trust and purchase money and non-purchase-money security interests.

[6]

Schedule D has a place to indicate that a claim is contingent, unliquidated or disputed. The option to mark the disputed column in Schedule D may have some significance under other chapters,7 but in a Chapter 13 case listing a secured claim (or any claim) as disputed serves no obvious purpose and can be misleading or damaging.8 Designating a secured claim as contingent or unliquidated has important consequences for the counting of debts for eligibility purposes.9 That a secured claim is listed as disputed will not affect its counting for eligibility purposes.10 Unliquidated and contingent claims should be listed but not counted for eligibility purposes.

[7]

Schedule D requires the debtor to indicate the amount of the secured claim without deduction for the value of the collateral. The debtor should list the total amount of debt to the secured claim holder notwithstanding that the creditor’s claim may be split into secured and unsecured components under 11 U.S.C. § 506(a).11 There is some dispute whether secured debts for purposes of Chapter 13 eligibility are the sum only of the secured portions of claims after the process of splitting claims or whether secured debts include the total amount of debt without regard to claims splitting.12 Schedule D to Official Bankruptcy Form 6 requires the debtor to list secured debts in their gross amount without regard to the value of the collateral. On the same schedule, however, the debtor is also required to list the unsecured portion of any secured debt. After BAPCPA, there will be debts described in the new hanging sentence at the end of § 1325(a) which escape application of § 506 and are treated as fully secured without regard to the value of collateral or the priority of liens.13 Schedule D offers no special instructions with respect to the scheduling of hanging sentence claims. From the layout of Schedule D, the drafters intend the debtor to calculate the total secured claims without considering claim splitting under § 506(a). If the debt limitations for eligibility purposes are determined from the Summary of Schedules, the numbers used for secured debt will not reflect the values of collateral or resulting secured and unsecured claims after claim splitting.

[8]

After BAPCPA, there are good reasons to be more careful determining the “date incurred” for each secured debt listed in Schedule D. The hanging sentence mentioned above contains two time markers—910 days before the petition and one year before the petition—that condition whether a secured debt is protected from valuation and cramdown through § 506.14 Refinancing may affect whether a debt is “purchase money” for purposes of the hanging sentence.15 BAPCPA created new exemption limitations that may be affected by property transactions that include consideration of secured debts within specified years or days before the petition.16 The date secured debts were incurred on Schedule D are more important after BAPCPA and this entry deserves more careful attention in preparation of the schedules.


 

1  See §§ 34.2 [ Petition, Signed by the Debtor ] § 36.2  Petition, Signed by Debtor—“Wet” Signature Issues and 34.4 [ Statement of Social Security Number ] § 36.6  Statement of Social Security Number.

 

2  See § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3  Section 342: Notice What Didn’t Happen.

 

3  Pub. L. No. 109-8, 119 Stat. 23 (2005).

 

4  11 U.S.C. § 342(c)(2)(A), discussed in § 365.1 [ Section 342: Notice in Chapter 13 Cases after BAPCPA ] § 4.3  Section 342: Notice What Didn’t Happen.

 

5  See § 14.1 [ Are Claims Split under 11 U.S.C. § 506(a)? ] § 14.4  Are Claims Split under 11 U.S.C. § 506(a)?.

 

6  Why the instruction to list in alphabetical order only appears on Schedule D is anyone’s guess.

 

7  See Fed. R. Bankr. P. 3003(c)(2) applicable only in cases under Chapters 9 and 11.

 

8  See § 17.1 [ Disputed Debts ] § 17.1  Disputed Debts.

 

9  See §§ 15.1 [ What Is a Noncontingent Debt? ] § 15.1  What Is Noncontingent Debt?15.7 [ Prebankruptcy Judgments ] § 15.7  Are Prebankruptcy Judgments Contingent? and 16.1 [ What Is a Liquidated Debt? ] § 16.1  What Is a Liquidated Debt?16.2 [ Effect of Defenses and Counterclaims ] § 16.2  Effect of Defenses and Counterclaims.

 

10  See § 17.1 [ Disputed Debts ] § 17.1  Disputed Debts.

 

11  See §§ 13.1 [ Use of Statements and Schedules in Eligibility Calculations ] § 14.3  Use of Statements and Schedules in Eligibility Calculations and 14.1 [ Are Claims Split under 11 U.S.C. § 506(a)? ] § 14.4  Are Claims Split under 11 U.S.C. § 506(a)?.

 

12  See § 14.1 [ Are Claims Split under 11 U.S.C. § 506(a)? ] § 14.4  Are Claims Split under 11 U.S.C. § 506(a)?.

 

13  See § 451.1 [ In General: Modification Without § 506 ] § 75.1  In General: Modification Without § 506.

 

14  See § 451.1 [ In General: Modification Without § 506 ] § 75.1  In General: Modification Without § 506.

 

15  See § 451.3 [ Only PMSIs Need Apply ] § 75.3  Only PMSIs Need Apply.

 

16  See §§ 405.1 [ In General ] § 48.2  BAPCPA and Exemptions407.1 [ New Exemptions and New Exemption Limitations ] § 48.3  Exemptions and Exemption Limitations Added by BAPCPA.