If your business is filing bankruptcy, you fill out Official Form 206E/F by listing every unsecured creditor in two parts: priority claims in Part 1 and non-priority claims in Part 2, with names, addresses, claim amounts, basis for the claim, and codebtor or contingency flags. The form is required for non-individual debtors under Bankruptcy Rule 1007 and must reflect the priority structure set by 11 U.S.C. § 507, which decides which unsecured creditors get paid first.
The biggest pitfall is treating Form 206E/F like the individual version (Form 106E/F) — they look similar but apply to different debtors and use different priority caps. Failing to schedule a creditor accurately can mean that debt survives the bankruptcy under 11 U.S.C. § 523(a)(3), and listing a priority claim incorrectly can blow up a Chapter 11 plan confirmation under 11 U.S.C. § 1129(a)(9).
According to the Administrative Office of the U.S. Courts, business bankruptcies rose more than 33% in fiscal year 2024, making accurate scheduling more important than ever for distressed companies, their lawyers, and their creditors.
Here is what you will learn:
- 📋 How to complete every line of Form 206E/F without missing a creditor
- ⚖️ How § 507 priorities order who gets paid first in your case
- 💰 The current 2025 priority caps, including the $15,150 wage cap
- 🏢 How Chapter 7, Chapter 11, and Chapter 12 filings change your strategy
- 🚫 The most common mistakes that void discharge or stall plan confirmation
What Form 206E/F Is and Who Files It
Form 206E/F is the official schedule titled Schedule E/F: Creditors Who Have Unsecured Claims, and it is filed only by non-individual debtors — corporations, LLCs, partnerships, and other business entities. The Judicial Conference promulgates the form under 28 U.S.C. § 2075, and the current version on the U.S. Courts forms page is the only acceptable version for filing.
Individuals use the parallel Form 106E/F, which has different priority categories (like domestic support obligations) that almost never apply to a business. Confusing the two is the single most common reason a clerk rejects a filing under Local Rule procedures.
The form is mandatory in every business bankruptcy chapter — Chapter 7 liquidation, Chapter 11 reorganization, and Chapter 12 family farmer/fisherman cases — because the Bankruptcy Rule 1007(b)(1) schedule requirement applies regardless of chapter. Skipping it triggers automatic dismissal under 11 U.S.C. § 521(i) for individuals and a “failure to file” notice for businesses, which can lead to dismissal or conversion.
The Difference Between 206E/F and 106E/F
The 206 series is for non-individuals and the 106 series is for individuals, a distinction set by Federal Rule of Bankruptcy Procedure 9009. The visual layout looks nearly identical, but the priority categories differ in important ways.
A business never owes domestic support obligations, so that § 507(a)(1) box is irrelevant on the 206. A business can, however, owe wage priority claims to its own employees and contributions to employee benefit plans, which are central to most Chapter 11 cases.
The misconception is that you can use either form interchangeably for an LLC. You cannot — using a 106E/F when you are an LLC is a defective filing, and the United States Trustee’s office will issue a deficiency notice that you must cure under 11 U.S.C. § 707(a)(3) or face dismissal.
Why Unsecured Claims Are Treated Separately
Schedule E/F exists because unsecured creditors are paid only after secured creditors recover their collateral, and within unsecured claims, priorities under § 507 determine the payout order. Secured debts go on Form 206D instead.
The consequence of misclassifying a secured claim as unsecured (or vice versa) is that the creditor may object under 11 U.S.C. § 502(a), and the court may reclassify it, throwing off your distribution math. In a Chapter 11 plan, that can force re-noticing of the entire creditor body and delay confirmation by months.
A real example: when Christine, a CFO of a small bakery LLC, listed the bank’s equipment loan on 206E/F instead of 206D, the bank’s objection delayed her plan confirmation by 90 days and cost the estate over $40,000 in extra professional fees.
Before You Start: Gather This Information
Filling out 206E/F begins with a complete creditor matrix, which is the master list of every entity owed money by the debtor. The matrix flows into 206E/F and the Rule 1007(a) list of creditors, and missing creditors is the most expensive mistake a debtor can make.
Pull every accounts payable aging report, every signed contract, every lease, every lawsuit complaint, every tax notice, and every employee payroll record going back at least one year. The U.S. Trustee Program guidelines expect debtors to perform a “reasonable inquiry” before signing the schedules under penalty of perjury per 18 U.S.C. § 152.
You also need accurate addresses. Bankruptcy notices that bounce back trigger re-noticing costs and can void discharge protection for that creditor under § 523(a)(3).
Required Documents Checklist
Pull these items before opening the form: accounts payable aging summary, vendor master file, all unexpired leases (also listed on Form 206G), pending lawsuits with case numbers, IRS and state tax notices, payroll records for the prior 180 days, employee benefit plan statements, and any guaranty agreements where the debtor is a co-obligor.
The consequence of skipping the payroll review is that you miss the wage priority claims under § 507(a)(4), which then surface at the meeting of creditors and force an amended schedule. Each amendment costs filing fees and attorney time.
A common misconception is that “small” creditors under $1,000 do not need to be listed. They do. Every claim, no matter how small, must be scheduled per Bankruptcy Rule 1007(a)(1).
Reasonable Inquiry Standard
A “reasonable inquiry” means the debtor’s officer signing the schedules must verify the information through books and records, not just memory. The Bankruptcy Rule 9011 signing standard mirrors Federal Rule of Civil Procedure 11.
If a court finds the inquiry was unreasonable, sanctions can include monetary penalties, denial of discharge for the responsible officer in their personal case, and even criminal referral under 18 U.S.C. § 152 for false oaths. Penalties under that statute reach up to five years in prison.
For example, Marcus, the CEO of a trucking corporation, signed schedules without reviewing the AP aging. The omission of $300,000 in fuel vendor claims led to a U.S. Trustee motion to dismiss with prejudice, killing the case.
Part 1: Listing Priority Unsecured Claims
Part 1 of Form 206E/F covers all unsecured claims that qualify for priority under 11 U.S.C. § 507(a). Priority claims must be paid in full in a Chapter 11 plan unless the holder agrees otherwise, per § 1129(a)(9), so getting Part 1 right is critical.
You list each priority creditor on its own line, starting at line 2.1 and continuing 2.2, 2.3, and so on. The form is dynamic in PDF form — the fillable PDF on uscourts.gov adds rows as needed.
Each line requires the creditor’s name and mailing address, the date the debt was incurred, the last four digits of any account number, the total claim amount, the priority amount, the non-priority amount (if the claim splits), the basis for priority (a § 507 subsection), and contingency/unliquidated/disputed flags.
Wage Priority Under § 507(a)(4)
Wages, salaries, and commissions earned within 180 days before the petition date are priority up to $15,150 per employee for cases filed after April 1, 2022 (the cap adjusts every three years per § 104, with the next adjustment effective April 1, 2025 raising the cap further). The current cap published by the Administrative Office for 2025-2028 is $15,150.
The consequence of missing the cap math is that you either over-promise priority (forcing you to pay more than required and shortchanging non-priority unsecureds) or under-promise (drawing employee objections that delay confirmation). Either way, the plan stalls.
A misconception is that severance pay always qualifies as priority. It only qualifies if earned within the 180-day window — older severance is general unsecured and goes in Part 2.
For example, Aisha runs a tech startup LLC that owes 12 engineers $25,000 each in unpaid wages from the prior 90 days. She lists each engineer on a separate line: $15,150 priority and $9,850 non-priority, totaling $25,000 per employee. That math drives the plan’s priority claims pool to $181,800.
Tax Priority Under § 507(a)(8)
Federal, state, and local taxes get priority status in specific time windows: income taxes for years where returns were due within three years of filing, trust fund taxes (employee withholding), property taxes incurred within one year, and certain customs duties and excise taxes. The IRS Insolvency Operations handles federal tax claims in business cases.
Trust fund taxes — the employee portion of Social Security and Medicare withheld but not remitted — are always priority and are also non-dischargeable for responsible individuals under the Trust Fund Recovery Penalty in IRC § 6672. Misclassifying trust fund taxes as non-priority triggers an immediate IRS objection.
A common misconception is that all tax debt is priority. Income tax debt older than three years (with timely-filed returns) is general unsecured and dischargeable in Chapter 7, but only if the § 523(a)(1) tests are met.
Employee Benefit Plan Contributions Under § 507(a)(5)
Unpaid contributions to employee benefit plans get priority up to the same $15,150 per employee cap, reduced by amounts already paid as wage priority. The Department of Labor’s EBSA often files proof of claim for delinquent 401(k) deposits.
The consequence of missing this category is exposure under ERISA § 502, where plan fiduciaries face personal liability separate from the bankruptcy. A misconception is that the company’s match is not a “contribution” — it is, and it counts toward the cap.
Part 2: Listing Non-Priority Unsecured Claims
Part 2 captures every other unsecured creditor — vendors, suppliers, lawsuit plaintiffs, credit cards, lease deficiency claims, and any priority claim amount that exceeds the cap. These claims are paid pro rata after priority and administrative claims, and in many Chapter 7 business cases recover zero cents on the dollar.
Each Part 2 line starts at 3.1 and continues sequentially. The fields are slimmer than Part 1 — you do not select a § 507 subsection — but you still record name, address, date incurred, last four of account, claim amount, basis (e.g., “trade debt”), and contingent/unliquidated/disputed flags.
The order of listing does not affect the order of payment for Part 2 — all general unsecureds share pro rata under § 726(a)(2) in Chapter 7 and within their class in Chapter 11.
Trade Debt and Vendor Claims
Trade debt is the most common entry in Part 2. List the vendor’s legal name (not the d/b/a), the address from the most recent invoice, the date of the oldest unpaid invoice, and the total balance.
The consequence of using a wrong address is that the vendor never receives notice and their claim survives the bankruptcy under § 523(a)(3) — though for a corporate Chapter 7 with no discharge, that matters less. For Chapter 11, the unnoticed creditor can collaterally attack the plan years later.
A misconception is that you should net out credits owed by the vendor. You should not — list the gross claim and disclose the offset right separately, because § 553 setoff rights are litigated separately.
For example, Devin, a restaurant LLC owner, owes a food distributor $42,000 but the distributor owes him $5,000 in rebate credits. Devin lists the full $42,000 on Part 2 and notes the setoff on the Statement of Financial Affairs (Form 207).
Lawsuit and Litigation Claims
Pending lawsuits where the debtor is a defendant must be listed even if liability is denied. Mark the claim contingent, unliquidated, and disputed by checking all three boxes on the line.
The consequence of failing to list a known lawsuit is that the automatic stay under § 362 may not protect you fully, because the plaintiff was not noticed, and judicial estoppel may bar later defenses if you concealed the claim. Courts have applied New Hampshire v. Maine, 532 U.S. 742 (2001) judicial estoppel principles to bar undisclosed claims.
A misconception is that you only list claims where damages are determined. List them all — that is exactly what “unliquidated” means.
Lease Rejection Damage Claims
If you plan to reject leases under § 365(a), the resulting rejection damages are general unsecured claims under § 502(b)(6), capped at the greater of one year of rent or 15% of the remaining lease term (not to exceed three years). Schedule them on Part 2 even before rejection — list them as contingent and unliquidated.
The consequence of omitting lease rejection claims is that the landlord files a late proof of claim and you face an objection battle. The Supreme Court in Maxus Energy and similar circuits has reinforced strict deadlines.
Part 3: Listing Other Notification Parties
Part 3 covers parties who should receive notice but who are not direct creditors — collection agencies, attorneys for listed creditors, and other agents. This part is often skipped, but it is required by Bankruptcy Rule 2002(g).
You list the agent’s name and address and reference the creditor line number it relates to (e.g., “See line 3.7”). This ensures that if a vendor’s collection lawyer has a “request for notice” on file, they receive every notice in the case.
The consequence of skipping Part 3 is that the collection agent claims they were not noticed and asserts a creditor’s rights survived. The misconception is that the original creditor’s notice is enough — it is not when the Rule 2002 notice request is on file.
Three Common Scheduling Scenarios
| Filing Situation | Required Schedule E/F Action |
|---|---|
| LLC owes $20,000 wages to one manager from past 60 days | Line 2.1 in Part 1: $15,150 priority under § 507(a)(4) and $4,850 non-priority on a separate Part 2 line |
| Corporation has pending $500,000 product liability suit | Line 3.1 in Part 2: list claim as contingent, unliquidated, and disputed; check all three boxes |
| Partnership owes IRS $80,000 in payroll trust fund taxes | Line 2.1 in Part 1: full $80,000 as priority under § 507(a)(8)(C); never reduce or net |
| Mistake on the Form | Direct Consequence |
|---|---|
| Listing equipment loan on 206E/F instead of 206D | Reclassification, plan delay, additional notice costs, possible re-vote |
| Forgetting collection lawyer in Part 3 | Notice defect, potential surviving claim, missed bar dates |
| Misstating wage cap as $13,650 (old cap) | Underpayment of priority, employee objections, plan rejection |
| Decision Point | Right Choice |
|---|---|
| Vendor disputes $10,000 of $50,000 claim | List $50,000 total, mark $10,000 disputed (or list as “disputed” overall) |
| Tax debt mix of trust fund and income tax | Split into two lines: priority on trust fund, non-priority on stale income tax |
| Severance promised but not yet earned | List as contingent on Part 2; do not claim priority |
Named Examples Walking Through the Form
Christine: The Bakery LLC in Chapter 7
Christine runs Sunrise Bakery LLC and owes $8,000 in wages to two part-time bakers (within 60 days), $22,000 to a flour distributor, and $4,500 in state sales tax. She files Chapter 7.
On Form 206E/F, Part 1, line 2.1 she lists Baker A: $4,000 priority under § 507(a)(4). Line 2.2: Baker B: $4,000 priority. Line 2.3: State Department of Revenue: $4,500 priority under § 507(a)(8)(C). Part 2, line 3.1: Flour distributor, $22,000, basis “trade debt.”
The total Part 1 priority is $12,500 and Part 2 non-priority is $22,000. These totals roll up to Form 206Sum and the Form 207 Statement of Financial Affairs.
Marcus: The Trucking Corporation in Chapter 11
Marcus runs Highway Freight Inc., a Chapter 11 debtor with 30 drivers, $450,000 in unpaid wages, $120,000 in 401(k) contributions, $200,000 in IRS trust fund taxes, $1.2 million in fuel vendor debt, and a $3 million product liability lawsuit pending.
He lists each driver separately in Part 1 with up to $15,150 priority under § 507(a)(4) and the excess in Part 2. The 401(k) plan goes on its own line under § 507(a)(5), reduced by any wage priority already counted per the § 507(a)(5)(B) offset rule. The IRS trust fund taxes go in Part 1 under § 507(a)(8)(C). The fuel vendor debt and the lawsuit go in Part 2, with the lawsuit marked contingent, unliquidated, and disputed.
This precise scheduling sets up his § 1129(a)(9) cramdown math for plan confirmation.
Aisha: The Tech Startup LLC in Chapter 11 Subchapter V
Aisha runs ByteForge LLC, a Subchapter V small business debtor under the Small Business Reorganization Act. She owes $80,000 in vendor debt, $25,000 in unpaid SaaS subscriptions, and $40,000 in disputed consultant fees.
All three claims go in Part 2 because none are § 507 priority. The disputed consultant fee is marked disputed, and the SaaS subscriptions are listed at full balance even though service is ongoing — Subchapter V’s § 1191 confirmation standard still requires accurate scheduling.
Mistakes to Avoid
- Confusing 206E/F with 106E/F — using the individual form for an LLC triggers a deficiency notice and possible dismissal.
- Skipping Part 3 notification parties — collection lawyers and agents miss notice, and their underlying creditors can attack the plan later.
- Listing secured claims on E/F — secured debts belong on Form 206D; misclassification delays confirmation.
- Using the wrong wage cap — the cap adjusts every three years per § 104, and using stale numbers underpays employees.
- Forgetting to check contingent/unliquidated/disputed boxes — unmarked contested claims are deemed allowed under § 502(a).
- Netting out vendor credits — list gross claims and address setoff separately under § 553.
- Using d/b/a names instead of legal names — service of process fails, and the Rule 7004 notice may be ineffective.
- Omitting small creditors — every creditor must be listed under Rule 1007(a), regardless of size.
- Missing trust fund tax priority — these are always § 507(a)(8)(C) priority and never general unsecured.
- Failing to update after amendments — amended schedules must be served on every affected party per Rule 1009.
Do’s and Don’ts
Do’s: – Do reconcile the schedule to the creditor matrix before filing — mismatches trigger clerk rejections. – Do split mixed claims into priority and non-priority lines — clarity prevents objections. – Do check all three flag boxes on disputed lawsuit claims — accuracy matters under Rule 9011. – Do verify mailing addresses against recent invoices — bad addresses void notice. – Do retain workpapers — the U.S. Trustee may request your reasonable inquiry support under § 521.
Don’ts: – Don’t guess at claim amounts — use books and records, not memory, under penalty of 18 U.S.C. § 152. – Don’t forget agents in Part 3 — Rule 2002 notice is not optional. – Don’t list executory contracts here — those go on Form 206G. – Don’t use round-number estimates for tax claims — match the IRS notice exactly. – Don’t sign without a certifying officer’s review — § 1746 perjury exposure is real.
Pros and Cons of Detailed Scheduling
Pros: – Pro: Maximizes § 523(a)(3) discharge protection because all creditors are noticed. – Pro: Speeds Chapter 11 plan confirmation under § 1129 by reducing objections. – Pro: Lowers risk of U.S. Trustee dismissal motions under § 1112(b). – Pro: Limits sanctions exposure under Rule 9011 by demonstrating reasonable inquiry. – Pro: Creates a clean record for any later § 727 discharge challenges in related individual cases.
Cons: – Con: Time-intensive and may require third-party claims agents for large cases. – Con: Increases noticing costs because every creditor receives every notice. – Con: Forces disclosure of disputed claims that the debtor would prefer to litigate quietly. – Con: Risk of inadvertent admissions if claims are listed without disputed/contingent flags. – Con: Amendments under Rule 1009 require re-service and additional fees.
State Law Nuances
While 206E/F is a federal form, several state-law issues bleed into the schedule. State wage claim statutes (e.g., California Labor Code § 1194) define what counts as “wages” and can trigger penalties that piggyback on the priority claim.
State sales tax authorities (such as the New York Department of Taxation and Finance) often hold trust fund priority similar to federal trust fund taxes, and missing them can pierce the corporate veil for responsible officers.
Local property taxes follow § 507(a)(8)(B): assessed within one year before filing and unpaid. State and local subordination rules vary, so check the local district’s bankruptcy court rules.
Filing Mechanics and Deadlines
Form 206E/F is filed with the petition or within 14 days after, per Rule 1007(c). Extensions require a motion and good cause.
Filing happens electronically through PACER/CM-ECF and requires an attorney’s electronic signature for represented debtors or an authorized officer for pro se corporate debtors (though most courts disfavor pro se corporate filings under local rules following Rowland v. California Men’s Colony, 506 U.S. 194 (1993)).
The filing fee for the petition is set by the Bankruptcy Court Miscellaneous Fee Schedule, and amendments cost an additional fee per Rule 1009 when adding creditors.
Recap of Key Rulings That Shape 206E/F Practice
The Supreme Court in Czyzewski v. Jevic Holding Corp., 580 U.S. 451 (2017) reaffirmed that priority distribution rules under § 507 cannot be circumvented through structured dismissals. This means your 206E/F priority listing has real downstream consequences for case outcomes.
In Hamilton v. Lanning, 560 U.S. 505 (2010), the Court endorsed flexible projection of disposable income, which interacts with how priority claims are treated in plan feasibility analysis.
The Court’s decision in Bullard v. Blue Hills Bank, 575 U.S. 496 (2015) confirms that plan denial is not a final order, raising the stakes for getting your initial 206E/F right rather than relying on serial plan amendments.
FAQs
Do I have to file Form 206E/F if my business has no unsecured creditors?
Yes. You file the form with “None” indicated in Parts 1 and 2 because Bankruptcy Rule 1007(b)(1) requires the schedule regardless of content. Skipping it is a deficiency.
Can I amend Form 206E/F after filing?
Yes. You may amend at any time before the case closes under Rule 1009, but you must serve the amendment on every affected party and pay any required fee.
Are domestic support obligations listed on Form 206E/F?
No. Businesses do not owe domestic support, so § 507(a)(1) never applies. Individuals use the parallel Form 106E/F for that.
Does the wage priority cap apply per employee or in total?
Yes, the $15,150 cap is per employee, not in total. Each employee gets their own line and their own cap analysis under § 507(a)(4).
Do I list disputed claims even if I will not pay them?
Yes. All known claims must be listed and marked disputed. Failure exposes you to § 523(a)(3) survival and judicial estoppel.
Can a corporation get a Chapter 7 discharge?
No. Corporations and LLCs do not receive a discharge in Chapter 7, but accurate scheduling still matters for trustee distributions and avoiding dismissal.
Is Form 206E/F filed under penalty of perjury?
Yes. The signing officer swears under 28 U.S.C. § 1746 and risks 18 U.S.C. § 152 penalties for false statements.
Do I need to list claims that are barred by the statute of limitations?
Yes. List them and mark them disputed. The trustee or debtor in possession can object later under § 502(b)(1).
Does Subchapter V change how I fill out Form 206E/F?
No. Subchapter V uses the same form. Confirmation rules differ, but scheduling rules under Rule 1007 are identical.
Are administrative expense claims listed on Form 206E/F?
No. Post-petition administrative expenses under § 503(b) are filed via motion or proof of claim, not scheduled on E/F, which captures pre-petition claims.
Does filing 206E/F stop creditor collection efforts?
Yes. The petition itself triggers the automatic stay under § 362, but accurate 206E/F listing ensures creditors actually receive notice of that stay.
Can I list a creditor as “unknown amount” if I don’t have the balance?
Yes. Mark the claim unliquidated and provide your best estimate, citing the Rule 1007 reasonable inquiry standard, then amend when you confirm the figure.
Related reading
- How to Fill Out U.S. Courts Form 106E/F (w/Examples) + FAQs
- How to Fill Out U.S. Courts Form 106Sum (w/Examples) + FAQs
- How to Fill Out U.S. Courts Form 206A/B (w/Examples) + FAQs
- How to Fill Out U.S. Courts Form 206D (w/Examples) + FAQs
- How to Fill Out U.S. Courts Form 206H (w/Examples) + FAQs
- How to Fill Out U.S. Courts Form 206Sum (w/Examples) + FAQs