One of the problems that Debtors commonly face in a Chapter 7 bankruptcy is a replacement vehicle. What do you do with a vehicle that has negative equity?  You don’t want to keep paying 15,000 for a 5,000 dollar auto.  The solution is to file a bankruptcy motion for a 722 redemption.

What is 722 Redemption?

Section 722 of the Bankruptcy Code allows you to file a motion and redeem your auto from the lender. Redemption is the ability to redeem or pay to the lender the retail value and have the lien released. You can pay cash or finance paying off the old lender. If you have an older auto in good condition and you merely owe too much for it often redemption is the answer. A motion is simply a request for some action that will help process the case along.

Redemption is done by simply filing a motion that shows the value of the auto with the court in support of your request to have the lien released. You must pay a lump sum of money immediately for the car but a redemption motion takes at least 20 days to be approved. Instead of paying the contract, you are paying the lender what he would have gotten if he sold the auto.

722 Redemption is a company in Cincinnati-Covington that supplies the funds through US Bank. 722 redemption is named after section 722 of the bankruptcy code that allows you to redeem the personal property. In addition to redeeming cars, you can also redeem boats, 4wheelers, furniture, and other personal property.

Why file a bankruptcy motion? 722 redemptions might be better than reaffirmations.

However, you can also simply buy a different vehicle and there is a company that sells bankrupt clients a 1-2-year-old car. This company is called 722 Redemption. 722 Redemption will not only supply the money to redeem your vehicle as a loan with US Bank. They also give you the option of purchasing a different vehicle. Sometimes you no longer have a friendly relationship with the bank. Or, another 2-3 years with the bank is just not possible. In addition, there may be other various reasons for not staying with the old bank.

It is also worth noting that the 722 loans report to the credit bureau and the loans are with a normal bank. Loans with banks build credit faster than credit unions and finance companies. Most “buy here, pay here” companies do not report to credit bureaus unless the report is negative. Of course, they do this in an effort to keep customers coming back to the “buy here, pay here”.

These are the cars 722 Redemption had when I wrote this on December 17th, 2013. You will notice that these cars are only 1-2 years old. Also, look at the mileage and prices.

Vehicle

Mileage

Estimated Payment*

2012 Nissan Sentra

41,000

$347-$382

2011 Toyota Camry

33,000

$362-$418

2011 Chevrolet Aveo

39,000

$301-$337

2012 Honda Accord

32,000

$338-$390

2012 Honda Civic

44,000

$351-$402

2011 Ford Fusion

45,000

$377-$423

2011 Ford Focus

30,000

$331-$375

2010 Nissan Rogue

17,000

$418-$472

2011 Chevrolet Silverado

27,000

$438-$496

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