In Chapter 7, if you are purchasing or leasing personal property, you are required to file a statement, called the “Statement of Intention” which states you are either keeping or surrendering the property. We prepared this form for you to sign with the rest of your petition documents and gave you a copy.
If you are keeping the property, you and the creditor must enter an agreement reaffirming/redeeming/or assuming (referred to as “the agreement”) the debt on the personal property and file the agreement with the court within forty five (45) days of the creditors meeting, failure to do so requires you to surrender the property; or the creditor, if your agreement contains an “ipso facto” clause, may require you to pay the full amount of the debt to keep the property.
You must show the court that reaffirming/assuming/redeeming the debt for the personal property is not a financial hardship for you. If your income and expenses do not show you have enough to pay this debt every month you must provide an explanation that identifies additional source of funds to make the payments.
You can represent yourself or retain our services.
When you are represented by your attorney and you can show the paying the debt is not a financial hardship, the Court generally approves the agreement without a hearing, however, some Courts feel it is their duty to hold a hearing which you and your attorney are required to appear and testify as to why the Court should approve the agreement. If you self represent, you will always be required to appear and testify as to why the Court should approve the agreement before the Court will approve the agreement.
If you change your mind within 60 days the Agreement is filed or before the Discharge Order for your case is entered, the agreement may be canceled. The creditor must be informed of the cancellation and the property must be surrendered to the creditor.
If you default on the agreement payments the creditor will take the property and have the right to collect any ‘deficiency’ of the debt against you personally, the Discharge Order does not Discharge the debt of the agreement.
What are the steps I must take? Decide whether you will self represent or notify us you wish to retain our services for this matter.
Self Represent Steps: 1. Complete the Agreement, sign and return to the creditor. The creditor will file the Agreement with the Court and the Court will set a hearing. 2. Attend and testify at the hearing. The court will either approve or not approve the Agreement.
Will your office help me? Yes, we will complete the papers, based on information you provide, meet with you to sign the papers at the 341a hearing and return the Agreement to your creditor. If your income and expenses do not show you are able to pay the debt, then you will need to provide proof of additional income. There is a fixed fee charge of $75 for our services, except when your agreement requires additional hearings and extensive negotiations, and then the fees are hourly.
Is there a hearing? The Agreement is usually automatically approved when you are represented by you attorney, without a hearing, however, some Judges who believe it is their duty to personally review your agreement and require you and your attorney to attend and testify at a hearing. When you self represent, the Court will set a hearing date and you will need to appear and testify.
What is required to assume a real property lease? If the lease expired before your petition was filed, then you do not have the right to assume the lease. You have the right to assume the lease if you do so within 60 days of filing your petition, if you fail to do so the lease is deemed rejected.
Light Advice: Bankruptcy is a financial decision, a remedy to financial stress. It offers a variety of ways to a fresh financial start. To determine whether it is better to keep or replace, consider all of the costs of either decision.
Some automobile dealerships are sensitive to the needs of debtors and offer loans that provide a new economical low maintenance vehicle loan to fit your financial fresh start budget and rebuild your credit score (as you make your regular monthly payments).