I wrote about the bankruptcy form called the “Statement of Intention for Individuals Filing Under Chapter 7” (usually “Statement of Intention” or “SOI” for short) back in August in a post about post-bankruptcy non-recourse debts. The SOI form debtors use played a prominent role, so I’d like to expand on it.
The SOI only appears in chapter 7 bankruptcies because debtors in chapter 13 keep their secured property. It’s separated into three parts, 1, 2, and 3. Part 1 deals with debtors’ secured debts, and Part 2 applies to their unexpired leases for personal property. In Part 1, debtors simply identify the creditor, describe the property, and then explain what they want to do with the property—the “intention” part. Debtors may surrender the property to the trustee, retain and redeem it, retain it and sign a reaffirmation agreement with the creditor, or go with an “other” option, which can include avoiding a lien or simply doing nothing while still repaying the debt. Debtors can also specify if the property is exempt.
As for Part 2, it’s even simpler. Debtors list the lessor, describe the property, and then choose to either assume or reject the lease. Debtors can attach additional pages as necessary and then all they need to do is sign the form (Part 3) and they’re done.
The form is as simple as bankruptcy forms get, unlike the mechanics of the means test. However, there are details debtors should be aware of. Debtors might not notice that business leases for nonresidential real property are excluded from the form. This happens because the Bankruptcy Code gives the power to assume or reject such a lease to the trustee exclusively. Debtors do not receive an opportunity to decide, complicating a chapter 7 bankruptcy that has personal and business characteristics.
The Bankruptcy Code gives debtors only 30 days from filing the bankruptcy or the date of the meeting of the creditors, whichever occurs first, to file the SOI and serve it on the creditors or lessors. Fortunately, debtors usually know what they plan to do with their secured property by then, so the SOI doesn’t cause any new problems. Debtors may ask the bankruptcy court for extensions.
The latest version of the SOI is here.
Completing the SOI is usually easy, strategizing the options often is not. Consequently, if you own money on secured assets or personal property leases, you should discuss your situation with an experienced New York bankruptcy lawyer.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.