Handbook For Chapter 7 Trustees: Instructions For Form 1



INSTRUCTIONS FOR FORM 1
INDIVIDUAL ESTATE PROPERTY RECORD AND REPORT

When to Complete Form 1

This record must be maintained for every case that is either expected to be or declared to be an asset case by the trustee, for each case in which the trustee has received funds of the estate, and for each case in which a no-asset report has not been filed and 60 days have passed since the initial examination of the debtor at the ァ 341(a) meeting.

How to Complete Form 1

Header Information

The trustee should enter the case number, case name, trustee name, date filed or converted, first date set for the ァ 341(a) meeting, claims bar date, and the reporting period ending date, as indicated. With respect to the date filed or converted, the trustee should enter the later of the date the case was filed under chapter 7 or the date the case converted to chapter 7. This date should be identified as filed (f) or converted (c), as appropriate.

Column 1: Asset Description (Scheduled and Unscheduled Property)

Form 1 accounts for all property listed on the debtor's petition, schedules, and statement of affairs, as well as any assets identified by the trustee which were not listed by the debtor.

First, all assets of the debtor from the petition, schedules, and statement of affairs should be listed. Similar types of assets (e.g., household goods) will often be lumped together by the debtor and may be listed as a group on Form 1, particularly if the trustee intends to administer them as a group. However, for ease of administration, most assets should be separately identified where possible. For example, the trustee will find it helpful to separately list each automobile and each piece of real property, even though the individual assets may have been reported together as a group in the petition, schedules, and statement of affairs. When an asset is jointly owned with a non-filing spouse or other party, Form 1 should reflect the debtor's interest (e.g., one-half)(4). If, for example, the debtor lists the full value of a house and the debtor's interest is one-half, the asset description on Form 1, should state "ï½½ share, 852 Jones Street." Likewise, the values shown in Columns 2, 3, 5, and 6 should reflect the debtor's share.

Second, any assets identified by the trustee, but not included in the petition, schedules, and statement of affairs, should be listed. These unscheduled assets should be identified by a (u) following the asset description.

Third, in a case converted from chapter 11, assets reported in the final report required by FRBP 1019(5), or in any schedules submitted post-conversion, should be listed. If no such report or schedules are filed, the assets remaining in the case are to be listed. The trustee should maintain a record in the estate file describing how the assets remaining in the case were determined.

Fourth, each type of income of an estate, such as post-petition interest, dividends, or rents, is to be shown as an unscheduled asset, separately from any pre-petition dividends or rents that were reported in the petition, schedules and statement of affairs. Accounting for these items on Form 1 will facilitate both the calculation of trustee compensation and the reconciliation between the Form 1 and Form 2 account balances.

To the left of each asset description, a reference number is inserted (beginning with #1 and following consecutively).

Column 2: Petition/Unscheduled Values

Column 2 reflects the dollar value of each asset, whether assigned by the debtor in the petition, schedules, and statement of affairs or by the trustee in the case of unscheduled assets. While scheduled values are often unreliable, they are the only valuation available until the trustee has the opportunity to obtain further information.

If the value assigned by the debtor in the schedules is "0," the trustee should enter "0" in Column 2. If the scheduled value is "unknown," the trustee should enter "unknown." Similarly, if the trustee cannot initially estimate a value for an unscheduled asset, the trustee should enter "unknown."

These entries should never be changed, even when the value later becomes known, unless the schedules or statement of affairs are amended by the debtor.(5)

Column 3: Estimated Net Value (Value Determined by Trustee Less Liens, Exemptions and Other Costs)

Column 3 records the value of each asset as determined by the trustee, minus any security interests, the debtor's allowed exemptions in the asset, and any other appropriate adjustment, such as costs to sell (if the value determined by the trustee minus these deductions is less than zero, enter "0"). This value represents the trustee's best estimate of the net sale or liquidation value of the asset. This column will be totaled to reflect the net dollar value determined by the trustee for all assets in the case.

At the beginning of administering a new case, the trustee may not always be able to estimate the value for an asset. When the value for a scheduled or unscheduled asset is unknown, the trustee should enter "unknown" in Column 3. By the end of the next reporting period, the trustee should be able to enter the value, as determined, less any security interests, exemptions, and other appropriate adjustments. Thereafter, the value should not change. The Column 3 value should never be changed to match the amount actually received from the sale or liquidation of the asset (e.g., the amount shown in Column 5).

Post-petition interest, dividends, and rent are exceptions to these requirements. Their Column 3 value may be designated "N/A".

The Column 3 total should equal the sum of all dollar values entered in Column 3.

Column 4: Property Abandoned

Column 4 is used to report the trustee's decision with respect to administering or abandoning each asset.

If Column 4 is left blank, it means that the trustee 1) intends to administer the asset, 2) has not decided whether to administer the asset or to abandon it pursuant to ァ 554, or 3) has already liquidated the asset (in which case a value should be reported in Column 5).

The trustee should enter "OA" in Column 4 to indicate property abandoned formally pursuant to ァ 554(a). A trustee will often formally abandon property that is burdensome to the estate, e.g., uninsured or contaminated property of no value that exposes the estate to potential liability or risk.

If the trustee intends to rely on ァ 554(c) and the closing of the case to abandon property that will not be administered, the trustee should use "DA" for deemed abandoned at close of case. An example of property that might be "deemed abandoned" is fully secured or exempt property that does not expose the estate to liability or risk.

It is recommended that the trustee add an explanation at the bottom of Form 1 for any entry that would obviously raise a question in the mind of a reviewer. For example, it would be helpful if the trustee would provide such explanations under the following scenarios: 1) an asset that has significant equity based on the schedules will not be administered because, on inspection, it was obviously not sellable, 2) an asset was not administered because the costs of recovery or of liquidation would exceed its value, or 3) the trustee discovered a lien not listed in the schedules which eliminated any equity in the property.

Column 5: Sales/Funds Received by the Estate

Column 5 indicates the gross amount of the proceeds from the sale or liquidation of each asset regardless of amounts that will be paid out to secured creditors or for expenses or as exemptions, whether paid out by the trustee directly or through a broker or auctioneer, etc. The amounts in Column 5 should be traceable to Form 2. This is accomplished by using the Form 1 reference number to identify the related transaction(s) on Form 2. For real property or auction sales, the gross proceeds are listed on Form 1, even though the trustee may have actually received the net proceeds, after deduction of costs and expenses.

If estate assets are sold together in a bulk sale, the trustee may receive a lump-sum remittance that does not provide a breakdown of the proceeds attributable to each asset. In this instance, the trustee should enter the gross amount received for one of the assets and explain in a footnote which other assets were included in the sale. See the sample Form for an example of this situation.

Column 6: Asset Fully Administered/Gross Value of Remaining Assets

When an asset has been fully administered (e.g., abandoned, sold, liquidated, or totally exempt), "FA" is entered in Column 6.

For assets still being administered by the trustee, Column 6 should reflect the trustee's current best estimate of the gross value remaining to be collected or administered. Guidelines for entries to this column follow:

  • If the asset has not been liquidated, normally the value from Column 3 should be entered in Column 6. If the trustee has determined that the Column 3 value is no longer valid, a different value should be entered in Column 6. If "unknown" or "N/A" is entered in Column 3, "unknown" should also appear in Column 6.
  • The difference between Columns 3 and 5 does not necessarily equal the figure recorded in Column 6.

The sum of the dollar figures in Column 6 is the Gross Value of Remaining Assets. This total is to be carried forward and reported on Form 3, Column 6.

Other Information

Additional information is required at the bottom of Form 1. Under "Major Activities Affecting Case Closing," the trustee should provide information about matters pending in the case, such as:

1) Assets that will be abandoned and why;
2) Status of liquidation efforts: pending sales, hearing or auction dates, etc.;
3) Status of adversary actions and appeals;
4) Status of claims objections/claims review and tax returns; and
5) Any other actions necessary to complete administration of the case.

For the case's first reporting period, the trustee must disclose under "Initial Projected Date of Final Report (TFR)," a realistic estimate of when the final report (TFR) will be filed. For subsequent reporting periods, the trustee should enter both the initial and current projected dates for filing the final report (TFR). The initial date should remain the same throughout the administration of the case.



Handbook for Chapter 7 Trustees
Effective 10/1/98
Page Last Updated on March 19, 1999.
United States Trustee Program/Department of Justice
usdoj-eoust/msd/vdp
Updated May 7, 2015

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