Bankruptcy Motion 722 Redemption

One of the problems that debtors commonly face in a Chapter 7 bankruptcy is a replacement vehicle. What do you do with a car that has negative equity? You don’t want to pay $15,000 for a $5,000 auto. But if you know the vehicle is reliable transportation you should keep it.  The solution is to file a bankruptcy motion for a 722 redemption.  Redeeming the auto allows you to pay the lender the retail value of the car instead of what is owed for it.

What is a Bankruptcy Motion 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 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 merely owe too much for it, redemption is often the answer. A motion is simply a request for some action that will help process the case along.  You can only redeem personal property like a boat, car, or furniture in Chapter 13. You can’t redeem a home.

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 pay 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. Of course, 722 Redemption is named after section 722 of the bankruptcy code that allows you to redeem your personal property. In addition to redeeming cars, you can also redeem boats, 4-wheelers, furniture, and other personal property.

⎆ 722 Redemptions Might be Better than Reaffirmations

However, you can also buy a different vehicle. 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 car. 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 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 standard 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 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 were only 1-2 years old when I wrote this. 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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If you are thinking about filing bankruptcy, don’t delay because timing is crucial. I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.

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