One of the documents you need to file with your Chapter 7 filing is called a “Statement of Intentions”. While the Statement of Intentions is usually filed with your petition, you actually have 30 days to file it. Of course, like all other filings, the “Statement of Intentions” can be amended until the date of discharge. The “Statement of Intentions” (Lets call it the SOI) tells the Court and your secured creditors what you intend to do with property that is “secured”, either by a lien, or another type of perfected security agreement. Generally, the property covered by the SOI is your car and home, although your jewelry of TV may also be secured if you purchased those items with a credit card issued by the place of purchase. Two common secured creditors are Best Buy and Kay Jewelers. Your options are to 1) Return the Property, 2) Retain and Pay pursuant to the Contract, or 3) Reaffirm the debt.
If you choose to reaffirm the debt, you promise to repay the debt, usually under the terms of the original agreement. This will require you to sign a “Reaffirmation Agreement” in the form specified by the Court. In some instances, the Court will have to approve the Reaffirmation Agreement. When you reaffirm the debt, you are not protected by the bankruptcy discharge and if you should become unable to pay on the debt, after your discharge, the creditor can sue you for the balance of the debt. Chances are, if you could not afford to pay this debt before you filed for Bankruptcy, you can’t afford to pay it after you file. Make sure you discuss the decision to Reaffirm with your attorney and get his/her input before you agree to reaffirm. Whatever you do, don’t let a creditor pressure you into Reaffirming a debt you don’t want to be responsible for after your discharge. If you do sign a reaffirmation agreement, you can revoke it up to the time the court issues your discharge.
