What is the Statement of Intention?

Individuals who file for Chapter 7 Bankruptcy will sign and file a Statement of Intention form with the Court.  This is a form typically filed with the initial bankruptcy petition stating how you want to treat certain debt.  On this form you declare whether you want to keep certain assets and continue paying on this debt.  Or you declare that you are surrendering the property and discharging the outstanding debt.

What Debts are Listed on the Statement of Intention?

Official Form 8 is entitled “Chapter 7 Individual Debtor’s Statement of Intention.”  Part A of this form deals with debts that are secured to property of the estate.  The two most common examples would be mortgage and vehicle loan lenders.  Here you state your intention of either surrendering or keeping the property.  If you are keeping the property you then state whether you will reaffirm or redeem the debt.  You also state if the property is exempt or not exempt.

Part B of the Statement of Intention deals with property that is still under a lease agreement.  Similar to the secured debt, here you declare whether you will assume the lease in accordance with 11 U.S.C. § 365(p)(2).  Assuming the lease makes you legally obligated for the outstanding amount owed under the original lease terms.

When is the Statement of Intention Filed?

According to 11 U.S.C. § 521(a)(2)(A) this document must be filed by the earlier of 30 days after the filing of your bankruptcy petition or on or before the date scheduled for the meeting of creditors.  Then, you have 30 days from the meeting of creditors to perform your stated intention.

What if You Change Your Mind?

If you originally state you want to keep certain property you can change your mind at a later time.  Sometimes it sounds good to keep the car you have been paying on for the past three years.  But after filing the case, and seeing how much you still have to pay for this car, it might make more sense to take no action and let this debt be included in the bankruptcy case.