What is the Statement of Intention in Chapter 7 Bankruptcy?
Of all the different types of bankruptcy, Chapter 7 is perhaps the most common. Like all other types of bankruptcy, there are certain requirements borrowers must meet when filing Chapter 7. One of these is filing the statement of intention. If you do not submit a statement of intention, your case might be dismissed by the court. A dismissal will mean your debt is not discharged, leaving you open to wage garnishments, creditors, and other forms of collection.
What is Official Form 108?
Official Form 108, known more commonly as the statement of intention, is one of the many bankruptcy forms you must submit to the court. This form notifies your creditors about how you are going to handle your secured debt such as your mortgage, lease, or auto loan. Before filing your statement of intention, it is important to understand your options. These include:
- Surrender the property: The simplest option in the statement of intention is to surrender the property. With this option, you simply return the property to the creditor. This option is best if you can no longer afford to pay for the property, the property has a lower value than what is owed on it, or you no longer need it.
- Reaffirm the debt: If you still must use the property, such as a car you need to get to work, it may be possible to reaffirm the debt. Reaffirming the debt allows you and the creditor to enter into a new contract. You may also be able to obtain better terms during negotiation. If you choose this option you must submit the reaffirmation agreement with the court so a judge can determine if it is in your best interest.
- Keep the property: If you are able to keep current with your payments, some creditors will allow you to keep the property without negotiating a new contract. If you fall behind on payments, the creditor has the right to repossess the property.
- Redeem the property: If you can buy the property back from the creditor, you can redeem it. You must pay what you still owe or the amount required to replace the property, whichever is lower. Due to the fact that filers must make this payment in a lump sum, this option is not often chosen.
What Happens if You Do Not File the Statement of Intention?
When filing Chapter 7 bankruptcy, you may have to file approximately 50 different documents, or even more. This includes the statement of intention. You are not required to file the statement of intention with your bankruptcy petition, but you must submit it within 14 days of filing the petition. If you fail to submit any of the required documents, including the statement of intention, it can give the judge reason to dismiss your case.
Our Chapter 7 Bankruptcy Lawyers in Florida Will Ensure All Documents are Filed
At Nowack & Olson, PLLC, our Florida Chapter 7 bankruptcy lawyers can advise on the necessary documents you need when filing and ensure they are all submitted to the court so there are no unnecessary delays in your case. Contact us to schedule a consultation and to get the sound advice you need.
Sources:
law.cornell.edu/uscode/text/11/chapter-7
uscourts.gov/sites/default/files/form_b108.pdf#:~:text=You must file this form,you list on the form.
