Completing Bankruptcy's Schedule C: The Property You Claim as Exempt

On Schedule C of the bankruptcy petition, you list all of the property you claim is exempt.

When filing for bankruptcy, one of the many forms you must complete is Schedule C: The Property You Claim as Exempt. Schedule C is where you list all of the legally exempt property that you want to keep.

(To learn about the other forms you must file, see Completing the Bankruptcy Forms.)

What Is Exempt Property and Why Is It Important?

While many people worry that they won’t get to keep any of their property when they file bankruptcy, this isn’t true. The law allows you to retain a certain amount of property so that you can live and work.

Each state has a set of exemption laws you can use to protect your property. Some states, however, allow you to choose between the state exemptions and the federal exemption scheme.

  • Exemptions in Chapter 7. If you list the exempt property on Schedule C, you get to keep it.
  • Exemptions in Chapter 13. Exemptions also matter for Chapter 13 bankruptcy because they play a role in determining how much you must repay unsecured creditors. Specifically, for every dollar of property that you keep over and above the allowed exemption amount, you must, at a minimum, pay that same amount to your unsecured creditors in your repayment plan. Ultimately, if you want to keep more property than what you can exempt, you must pay for it.

(To learn more about how exemptions work, which property is exempt, and what exemptions you can use, see Bankruptcy Exemptions.)

How to Get and Complete Schedule C

You can find the most recent version of Schedule C on the U.S. Court’s website. Here’s the information you’ll need to provide:

Exemption system you’re using. In the first section, you have to check one of two boxes. Your choice tells the court whether you will use the federal exemption system (11 U.S.C. § 522(b)(2)) or your state exemption system (11 U.S.C. § 522(b)(3)). Not every state allows you to choose between the federal and state systems, however. In fact, most require you to use the state exemptions. Because of residency requirements, some filers won’t qualify to use any state’s system. If that happens, you can use the federal exemptions. To learn more, see Bankruptcy Exemptions: An Overview.

Description of property. In the first column of Schedule C, you must describe each item of property or each asset that you are claiming as either fully or partially exempt (it will only be partially exempt if the value exceeds the exemption amount). Use the same property description you used in Schedule A/B.

Schedule A/B line number. Check Schedule A/B and find the line on which you originally listed the property. In the first column, insert that line number where it says “Line from Schedule A/B.” This helps prevent confusion about the particular property you’re exempting.

Current value of the portion you own. In the second column of Schedule C, you’ll enter the current replacement value of the portion you own and are claiming as exempt. This means that if you’re the only owner, you’ll write down the entire value. If you and someone else own the property on a 50/50 basis, you’ll declare half of the value. Use the information you already provided on Schedule A/B so that the figures are consistent. Also, make sure it matches the value on Schedule D: Creditors Who Have Claims Secured by Property, if applicable. For more information, read How to Fill Out Bankruptcy Forms.

Amount of exemption you claim. In the third column, you have two choices. If your exemption schedule only allows you to exempt a certain dollar amount, check the first box and insert that number. If, however, the exemption statute allows you to exempt an unlimited dollar amount, check the second box, “100% of fair market value, up to an applicable statutory limit.”

Specific laws that allow the exemption. In the fourth column of Schedule C, you’ll provide the statutory citation (the code number for the law that allows for the exemption) that gives you the legal right to exempt that item. If you aren’t sure about this, you should consult with legal counsel.

Claiming a homestead exemption more than $160,375. If you are not using state exemptions that provide a homestead exemption greater than $160,375, check no. Check yes if you are using state exemptions that provide a homestead exemption greater than $160,375 (you’re only likely to do this if you have more than $160,375 of equity in your home). Check yes again if you acquired the property within 1,215 days of filing the petition. In certain situations, your homestead exemption may be capped at $160,375. To learn more see, The Homestead Exemption in Bankruptcy.

To learn more about getting the official forms, see The Bankruptcy Forms: Getting Started.

This article provides general information only. There are many legal issues involved and important decisions to be made when filing for bankruptcy. You must understand the entire bankruptcy process, learn about the applicable federal and state laws, and determine how those laws will affect your particular situation before you complete the bankruptcy forms. If you want to file bankruptcy without a lawyer, use a good do-it-yourself book like Nolo's How to File for Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D. to ensure you make well-informed decisions about your bankruptcy case.

Updated July 10, 2018

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