Search Site
Menu
Redeeming Property in Chapter 7

Bankruptcy is intended to provide individuals with a fresh start. 11 USC 722 of the Bankruptcy Code provides one potentially valuable tool that Jeff Field & Associates can help you utilize to obtain your fresh start.

Under 11 USC 722 of the Bankruptcy Code, which is available only in chapter 7 bankruptcy, you may redeem tangible, personal property by paying to the current secured lien holder the “replacement value” of the property. Replacement value is the price a retail merchant would charge for property of that kind, considering the age and condition of the property. As an example of how 722 redemption works, you finance a vehicle worth $10,000 but you owe $20,000 on the loan. 722 redemption allows you to purchase the car from the current creditor for $10,000, saving yourself from paying back $10,000 on an underwater asset. Unfortunately, you may only redeem the property by paying a “lump sum” to the current lienholder rather than through installments. Most people in bankruptcy, will not have the means to personally fund a redemption, but fortunately, even if you cannot come up with the money either personally or from friends or family, there are several companies that specialize in providing redemption loans specifically for this purpose. Although these redemption loans typically have very high interest, in many situations you can end up with a significantly lower car payment and paying much less for the vehicle than you would have otherwise.

While redemption is most commonly used for vehicles, it may also be utilized for other personal property, such as jewelry, furniture and electronics. Redemption also does not require that you be current on the loan, which allows you to obtain chapter 7 debt relief and keep property for which you are delinquent.

In many cases, redemption is not feasible or practical, but in some cases it can be very beneficial saving thousands of dollars and truly providing that fresh start bankruptcy law intended. Our attorneys can work with you to determine whether a strategy involving redemption is in your financial best interests.


Related Blog Posts:


 

Leave a Reply

Your email address will not be published. Required fields are marked *

Videos
Our Attorneys
Client Reviews
  • lawyers
    5.0/5.0

    I enjoyed working with Jeff and his team. They were always there to help and answer any questions that I had in a timely manner. I highly recommend Jeff Fields and Associates.

    Read more

    Client

  • lawyers
    5.0/5.0

    This attorney made a very difficult situation much easier. Everyone treated me compassionately and with respect. The attorney and staff are very professional and knowledgeable. They were always available to answer questions and just lead me through t...

    Read more

    Client

  • google
    5.0/5.0

    Mr. Fields and staff were extremely professional and courteous. They made the process very easy. They are affordable for all. If you are considering bankruptcy, do not hesitate to give the a call. I am a legitimate client of theirs and not a paid pos...

    Read more

    Tim Willard

  • google
    5.0/5.0

    We worked with Chris and Casey. They were amazing, responsive, and kept us updated throughout the entire process. Anytime I had questions, I received a response within 24 hours and couldn’t be more pleased with their professionalism and their abili...

    Read more

    Briana Culver

  • lawyers
    5.0/5.0

    Very easy to work with, took care of my bankruptcy challenges & hot me out of the right spot I was in.

    Read more

    Client

See all reviews
Contact us

Please fill out the form below and one of our attorneys will contact you.

Quick Contact Form