If you are filing for bankruptcy, what is your intention regarding the property that serves as collateral for your debts? Although the debt may be discharged, the security agreement remains in effect, and the creditor still has the right to use the collateral to satisfy at least part of the debt.
Part One
Part one of the statement of intention requires you to “list the creditors who hold secured claims.” You may recall that this refers to secured debts. This section does not refer to any secured debt, but to debts that are secured by bankruptcy property. When you file a bankruptcy case, all your property becomes bankruptcy property, which is managed by the trustee (except for any exempt property).
In part one, you should first list the name of the creditor for the secured debt. For example, if the secured debt is a home loan, list the name of the loan in the “Name of Creditor” field. Next, you must provide a description of the property that secures the debt in the “Description of Secured Property” section. For example, you might write the address of your home if the secured debt is a home loan.
After these sections, there are optional check boxes to explain what you plan to do with the property.
- Turnover of Property – Return it to the creditor in exchange for cancellation of your obligation on the debt.
- Retain Property and Redeem – Redeeming the property involves paying the retail value of the property at the time you filed for bankruptcy, even if you owe more than the property is worth. This requires filing a motion with the bankruptcy court.
- Retain Property and Reaffirm Debt – You may also choose the “Reaffirm” box, which means you wish to take back the debt. This means the debt will remain valid after bankruptcy.
- Retain Property and [Explain] – This box is typically chosen if you wish to continue paying the creditor according to the original agreement (although there are other options). If you check this box, you must write a brief explanation of what you plan to do with the property, such as keeping it without reaffirming and continuing payments.
The last two boxes in part one require you to indicate whether the property is claimed as exempt or not.
You must fill out each of the above for each item of property that is secured by bankruptcy property. Remember that this usually includes a home loan and a car loan for most individuals (although it can include other items).
Part Two
Part two of the statement of intention asks you about personal property that is subject to an active lease agreement. This refers to personal property that you have rented from a creditor. For example, if you are renting a car, you will need to inform the court of what you wish to do with the lease.
Like part one, you must write the name of the lessor. The lessor is the person who rents the property to you (for example, the car company). Next, you should describe the leased property. This is usually straightforward. For example, for a rented car, describe the make and model of the car. The last question to complete in part two is “Will the lease be assumed?” If you wish to keep the property and continue paying the lessor, you should check the “Yes” box. If you no longer wish to keep the lease, check the “No” box.
Part Three
Like many other bankruptcy forms, you must sign and date the statement of intention under penalty of perjury.
Updated by Carron Nicks.
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Source: https://www.thebalancemoney.com/bankruptcy-statement-of-intention-316217
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