Schedule I is one of the bankruptcy forms you’ll file with your petition. It’s titled “Your Income” and the purpose of this form is to tell the court how much you’re making each month and specifically, what your take-home income is.
When listing your payroll deductions, you may have noticed that it asks for “mandatory contributions for retirement plans” (Line 5b) and “voluntary contributions to retirement plans” and you may be wondering what that’s all about.
Mandatory contributions are contributions you’re required by law to make and it’s not something you can opt-out of. For example, the Arizona State Retirement System makes it mandatory for all state employees to pay into the system.
Voluntary contributions are contributions to a 401k, pension or other retirement vehicle that you choose to make. There’s no legal requirement that you contribute to this type of requirement and you can stop, or opt-out, if you no longer want to pay in. Chances are that if you work for a private non-union employer, your retirement contributions are probably voluntary.
If you’re not sure whether your contributions are voluntary or mandatory, your HR or payroll department is the best place to find out.
401k Loans: Note that 401k loan repayments, while mandatory, are given a separate spot on this form. Line 5d asks for “required repayments of retirement fund loans.” If you borrowed money from your retirement account, this is where you’d list the repayments. Note that 401k and similar retirement loans are essentially loans from yourself to yourself that are not discharged in bankruptcy.