The Countryman test, the assumption-or-rejection election, the universe of overlooked agreements, and the consequences of omission.
Schedule G is the schedule on which an individual debtor lists every executory contract and every unexpired lease in which the debtor is a party as of the petition date. It is short - typically a few lines - and that brevity misleads debtors into thinking it is unimportant. The opposite is true. Schedule G is the source document for the trustee's election under 11 U.S.C. Section 365 to assume or reject the listed contracts, for the calculation of cure costs on assumption, for the measurement of rejection-damage claims, and (in Chapter 13) for the integration of executory-contract treatment into the plan under Section 1322(b)(7).
The form itself asks the debtor to identify each contract counterparty, to describe the contract or lease, and to state the state and ZIP code at which the counterparty receives notice. The form does not ask the debtor to elect assumption or rejection on Schedule G; that election appears on Form 108 (Statement of Intention) in Chapter 7 and in the plan in Chapter 13. The Schedule G entry is the predicate; the election is downstream.
The Bankruptcy Code does not define "executory contract." Courts have almost universally adopted the definition advanced by Professor Vern Countryman in his 1973 article: an executory contract is one under which the obligations of both parties are so far unperformed that the failure of either to complete performance would constitute a material breach excusing the performance of the other.
The Countryman test has two components. First, both parties must have remaining performance obligations - if the debtor has fully paid and the counterparty has fully delivered, the contract is not executory regardless of any continuing warranty obligations or post-performance covenants. Second, the remaining obligations on each side must be material - obligations to indemnify, to maintain confidentiality, or to refrain from compete activities are often not material in the breach-excusing sense.
A few courts apply a "functional" test that asks whether designating the contract as executory furthers the rehabilitative goals of bankruptcy; that approach is the minority. The Countryman test governs in most circuits and is the default lens for evaluating whether a particular agreement belongs on Schedule G.
The omissions trustees most frequently catch fall into a handful of recurring categories. Each is an agreement the debtor uses every day and forgets to list precisely because it feels mundane.
A monthly cell phone service plan with a contractual minimum term (12, 24, or 36 months) is an executory contract. Both parties have remaining performance: the carrier must continue to provide service, and the subscriber must continue to pay. Failure of either side to perform would breach. Month-to-month plans without minimum-term commitments are closer questions but are usually treated as executory by the carrier; conservative practice is to list them. Cell phone device financing obligations (typically an installment sale of the handset itself) are a separate matter and belong on Schedule D or E/F, not Schedule G.
Multi-month or annual gym memberships with cancellation penalties are executory. The same analysis applies to streaming video and music services billed annually, subscription boxes with minimum-term commitments, software-as-a-service annual subscriptions, and similar arrangements. The fact that the debtor can cancel the service by paying an early-termination fee does not eliminate the executory character; it merely sets the rejection-damages measure.
A perpetual software license with no remaining payment obligation is not executory. A subscription software license with continuing payment obligations and continuing license-grant obligations on the vendor's side is executory and belongs on Schedule G. Software licenses with annual maintenance or update obligations are uniformly treated as executory.
A residential lease with months remaining on the term is an unexpired lease and goes on Schedule G even though it also influences Schedule J expense entries and may need cure-amount disclosure on Form 108. A vehicle lease (not a vehicle finance purchase) is an unexpired lease for Schedule G purposes. Trustees frequently encounter Schedule G filings that list neither, paired with Schedule J entries that show a rent and a car payment - an inconsistency that triggers a trustee inquiry.
Self-storage rentals on multi-month commitments, home-security monitoring service contracts, country club or social club memberships with continuing dues obligations, and similar arrangements are executory and should be listed.
Under Section 365(p)(2), if a Chapter 7 trustee does not assume a personal-property lease within 60 days after the order for relief, the lease is deemed rejected and the property is no longer property of the estate. An individual debtor may then enter into a written assumption agreement with the lessor and obtain a discharge-non-affecting reaffirmation-equivalent. For real property unexpired leases under non-residential leases of the debtor, Section 365(d)(4) imposes a 120-day deadline (extendable). For residential real property unexpired leases of the debtor under Section 365(d)(2), the trustee has until plan confirmation in a Chapter 13 (or until conversion or dismissal). Practical effect: failure to assume within the statutory window in Chapter 7 is rejection by operation of law, with consequences flowing from the rejection.
Under Section 365, the trustee (or debtor-in-possession in Chapter 11; debtor in Chapter 13) may assume, reject, or (with court approval) assume and assign each executory contract or unexpired lease. Assumption requires the debtor to cure all defaults (or provide adequate assurance of prompt cure), compensate the counterparty for actual pecuniary loss caused by the default, and provide adequate assurance of future performance. Rejection constitutes a breach of the contract immediately before the petition date; the counterparty has a general unsecured claim for the rejection damages, capped (for real-property leases) by Section 502(b)(6).
In Chapter 7 cases of individuals, contracts not assumed within 60 days of the order for relief (Section 365(d)(1)) are deemed rejected. In Chapter 13, the plan may provide for assumption, rejection, or assignment of executory contracts and unexpired leases under Section 1322(b)(7).
Several arrangements are commonly miscategorized as executory:
An unlisted executory contract is not automatically rejected. The trustee cannot reject a contract that is not before the court. The counterparty retains its non-bankruptcy remedies, and the debtor's discharge may not reach claims arising from the unlisted obligation if the contract is not properly scheduled and the counterparty had no notice in time to act. Beyond claim-discharge issues, an unlisted lease that influences Schedule J expense entries creates an evidentiary inconsistency that draws trustee scrutiny across the entire schedules package.
Schedule G is short, but its surface area is the whole of the debtor's contractual relationships. The Countryman test is the filter; the universe of items to apply the filter against is much larger than most debtors first imagine.
This page provides general information about Official Form 106G under the Federal Rules of Bankruptcy Procedure. It does not constitute legal advice. The classification of a particular agreement as executory or non-executory should be evaluated by qualified counsel.
Last modified: 2026-05-22