The terms "asset" and "liability" are raised constantly in bankruptcy. The bankruptcy trustee reviewing your petition will ask if you have listed "all of your assets and liabilities" during your Meeting of Creditors. But, it is not always clear what they do (and do NOT) refer to.
I already discussed what an asset is for bankruptcy purposes, so now I want to take a little time to talk about liabilities, which are listed in Schedules D,E, and F of the voluntary bankruptcy petition.
A liability is a debt you owe, or an obligation you have incurred. This probably sounds more complicated than the simple question "what is a liability?"... and it probably is! But, for the purpose of bankruptcy, knowing what you owe and what constitutes an obligation can be very important.
The clearest examples of a liability are credit card debts, student loans, medical bills, and personal loans. You have received goods or services, consumed them, and now you have a bill. You'll want to find and disclose all of these liabilities in your bankruptcy to make they are included and discharged. These liabilities are listed on Schedule F of the bankruptcy petition as "unsecured, non-priority debts".
Taxes, child support, and alimony are also liabilities, though they are considered "priority", and therefore must be paid back in bankruptcy, or they are not discharged. These liabilities are listed in Schedule E of the bankruptcy petition.
It is sometimes less clear to a potential bankruptcy filer that a mortgage or car payment is a liability. You certainly get to enjoy the car and live in the home. But, mortgage and car payments are ongoing debt obligations. Fortunately, bankruptcy law allows you to continuing paying on these liabilities and keep the property. Not all liabilities are discharged, nor are they required to be. So, you listed the secured car payment or mortgage (on Schedule D of the bankruptcy petition) and keep making the payment.
Leases are also liabilities. Like car payments and mortgages in bankruptcy, you have the option of continuing on the payment and obligation, or rejecting it and returning the property. Make sure to discuss your options with your bankruptcy attorney.
As an experienced Pittsburgh bankruptcy lawyer, I will help you organize, disclose, and manage your liabilities. I will run a bankruptcy-specific credit report and review it so you understand your liabilities. And I will make sure you know what liabilities are discharged (and which are NOT).
Assets and liabilities are the "stuff" of bankruptcy, make sure you are familiar with yours before meeting with your bankruptcy attorney.