If you have filed Chapter 7 bankruptcy or plan to file Chapter 7 bankruptcy then a 722 Redemption Loan is something you should be aware of. It allows you to keep the car you have instead of losing it in these difficult times. Even if you owe more money on your automobile then it is currently valued at, a 722 Redemption Loan can make it possible for you to take control of your current financing troubles.
There is a bankruptcy law that benefits Chapter 7 filers, but it is based on their individual case. The Car Redemption law, 11 USC 722 "Redemption" says that a Chapter 7 bankruptcy filer that is upside down on their loan (owes more on the car then it is worth) can have the courts force the current lender to release the lien on the vehicle to the filer so they own the car outright.
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Sounds great right? Well, the only issue is that the filer has to payout the value of the car in cash to their current lender. Take for example:
Car Value = $4,000 Amount owed to current lender = $10,000
The filer must pay out $6,000 in cash to the current lender to be given the lien to the car. In the extremely rare case that the filer has $6,000 to pay their current lender they can own the car, but this is generally not the case of a Chapter 7 filer.
This is where a 722 Redemption Loan comes to ease the difficulties of paying the current lender. The filer can apply for a new loan to cover the costs of the amount owed on the loan. Thus, lowering their monthly payments and the loan balance so they can keep the car they have and get a fresh start!
The 722 Redemption Loan must be approved by the Bankruptcy Court and handled by your bankruptcy lawyer. Upon qualification, you can start Lowering Your Monthly Payments and Loan Balance. There is no down payment required on the loan; all fees for legal services are included in the loan. A 722 Redemption Loan is often called Car Redemption, Redemption Car Loan, and sometimes just a 722 Redemption. If you have a bankruptcy lawyer already or plan to file Chapter 7 then make sure to ask them about it. There is a way to keep your car even after you have filed Chapter 7 bankruptcy and it is a 722 Redemption Loan.
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