What Is A Bankruptcy Statement Of Intent?

Posted: March 3, 2023 at 10:34 am

A bankruptcy statement of intent is a document that a debtor is required to file in a bankruptcy case to indicate whether they plan to keep or surrender certain assets that are secured by a lien or a mortgage. The statement of intention is typically filed with the bankruptcy court within 30 days of the debtor’s bankruptcy petition being filed.

The statement of intent is an important document in a bankruptcy case because it determines what will happen to secured assets such as a car or a house. If the debtor intends to keep the asset, they must continue to make payments on the loan that is secured by the asset. If the debtor intends to surrender the asset, they must make arrangements to return it to the creditor.

The statement of intent bankruptcy form is also important because it allows creditors to know what the debtor intends to do with the secured asset. If the debtor intends to surrender the asset, the creditor may be able to repossess it more quickly and avoid additional costs associated with the repossession process. If the debtor intends to keep the asset, the creditor may be able to negotiate new payment terms or modify the loan agreement.

The statement of intent is filed with the bankruptcy court and must be served on the creditor who has a security interest in the asset. The statement of intent must include the name and address of the creditor, a description of the asset, and whether the debtor intends to keep or surrender the asset. If the debtor intends to keep the asset, they must also indicate whether they intend to redeem the asset, reaffirm the debt, or continue making payments under the original loan agreement.

Redemption is an option for debtors who want to keep a secured asset, but the value of the asset is less than the amount owed on the loan. In this case, the debtor can pay the creditor the fair market value of the asset, and the creditor must release the lien or mortgage.

Reaffirmation is an agreement between the debtor and the creditor to continue making payments under the original loan agreement. The reaffirmation agreement must be approved by the bankruptcy court and must be in the best interest of the debtor.

Continuing to make payments under the original loan agreement is an option for debtors who want to keep a secured asset and can afford to make the payments. This option does not require court approval, but the debtor must continue to make the payments to avoid repossession.

In conclusion, a statement of intent is a document that a debtor is required to file in a bankruptcy case to indicate whether they plan to keep or surrender certain assets that are secured by a lien or a mortgage. The statement of intent is an important document because it determines what will happen to secured assets such as a car or a house. If the debtor intends to keep the asset, they must continue to make payments on the loan that is secured by the asset. If the debtor intends to surrender the asset, they must make arrangements to return it to the creditor. The statement of intent must include the name and address of the creditor, a description of the asset, and whether the debtor intends to keep or surrender the asset. If the debtor intends to keep the asset, they must also indicate whether they intend to redeem the asset, reaffirm the debt, or continue making payments under the original loan agreement.