When you file for Chapter 7 or Chapter 13 bankruptcy, you will need to fill out and file several forms, referred to as official bankruptcy forms. Among these forms is the Individual Debtor’s Statement of Intention (also called Form 8), on which you will inform the bankruptcy trustee and your secured creditors of what you’d like to do with your secured property. Secured property is any property that functions as collateral for a debt you owe, or an unexpired lease. Below is a discussion of some frequently asked questions regarding the Statement of Intention. For more questions about your statement of intention be sure to contact our expert Albuquerque bankruptcy lawyer.
The Statement of Intention form can be located on the United States Courts’ website, at www.uscourts.gov.
You do not need to file the Statement of Intention at the same time that you file the rest of your bankruptcy forms, although you can if you choose to. Instead, you may file the Statement of Intention within thirty days of having filed your petition for bankruptcy, or by the date on which the meeting of creditors is set- whichever date comes first.
If you fail to file the Statement by the deadline, the automatic stay which might otherwise work in your favor could terminate with regard to your personal property and any leases for personal property you may have.
In part A of the form, you will be asked to describe every item of secured property, and give information about the creditor who holds the debt secured by that property. You must also explain your intent for that property, as well as the exemption status of the property.
In part B, you will need to provide information on any property you are leasing, the name of the lessor, and whether or not you plan to assume or reject the lease.
When you file for Chapter 7 bankruptcy, you may either surrender your property, or choose to retain it. If you surrender the property, you will have to return it to the creditor. Or, you can redeem the property if it secures a debt other than a business debt (a consumer debt), if the property is tangible, and if the property is exempt or has been abandoned by the trustee. When redeeming property, you will pay a lump sum to your creditor which will be equal to the value of the debt or the value of the property, whichever amount is less.
You also have the option of reaffirming the debt. You may also be able to keep the property by doing so. If you choose this option, you will continue to be obligated to repay the debt after you have received after you have been given a bankruptcy discharge. Alternatively, you could take other action. If your intent is to avoid the property lien, you will be able to indicate that in an “other” box. You should weigh these options carefully before making a decision. Consider each of these options carefully before you decide what to do.
If you are leasing property like a car, and that lease is still in effect, your bankruptcy trustee might assume the lease from you as part of the bankruptcy estate or reject the lease and terminate it. In the majority of Chapter 7 bankruptcy matters, personal property leases do not carry much value with them with regard to the bankruptcy estate, causing the trustee to not bother with assuming them.
If the trustee does not end up rejecting the lease, then you will have two choices as to how to proceed. First, you could assume the lease. Alternatively, you could terminate the lease. You will indicate which option you choose as part of you Statement of Intention before the trustee makes a decision.