What is the Statement of Intention in a Chapter 7?

21 Apr What is the Statement of Intention in a Chapter 7?

A Statement of Intention is required to be filed in Chapter 7 cases. It is not required in Chapter 13 cases. The Statement of Intention is a form completed by the debtor that advises the court, the Trustee, and your creditors what you intend to do with your secured collateral such as your home or car. This document also applies to leases. It requires a the debtor to state (1) whether the property will be surrendered or retained, (2) whether it will be claimed as exempt, (3) whether the debtor intends to redeem the property, and (4) whether the debtor intends to reaffirm the debt secured by the property. It must be filed within thirty (30) days after the debtor files a petition under Chapter 7 or on or before the 341(a) Meeting of Creditors, whichever is earlier. The debtor must decide if he is (1) going to reaffirm the debt and retain the collateral and continue paying for it, (2) surrender the property, or (3) redeem the property. The statement must be served on the trustee and each creditor named in the statement on or before the date the statement is filed. Nothing in the rules prevent a debtor changing his mind regarding his intention. The debtor may file an amended statement at any time before the time period for performance of the intention expires.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
1Comment
  • Martha De la Rosa
    Posted at 18:34h, 07 May

    I am still a co-owner of a home that my ex husband occupies. My ex is current in the 1st mortgage payments, but has not been paying the second mortgage (a home equity line of credit which amounts to roughly a third of the value of the home). The house is $2,000 to $5,000 underwater with regard to these two mortgages. Should I elect to “surrender” or “retain”?