Bankruptcy and 722 Redemption
Are you considering filing for Chapter 7 bankruptcy? If yes, you will have many choices to make and one of these is how to handle your auto debt. At LEAP, we understand that this is a very difficult decision and we work hard to present you with good alternatives for your auto needs.
Consumers have three options for their auto loans in a Ch. 7 bankruptcy:
- Reaffirm – Pay current lender the agreed terms of the auto debt including full principal balance
- Redeem – Pay fair market value for the vehicle in one lump sum (‘722 redemption’)
- Surrender – Return the vehicle to the lender to resolve the auto debt
What is 722 Redemption and why don’t more people do this?
Through a little known section of the Bankruptcy code, consumers are able to ‘redeem’ their vehicle by paying fair market value for the car. In many cases, this is better financially than reaffirming their current auto debt, but unfortunately few consumers take advantage of this opportunity. One obvious reason is that the consumers do not have enough money to pay for the car outright.
This is where LEAP can help. LEAP offers financing for people who wish to take advantage of the redemption option. We work exclusively with customers that have bad credit, are facing repossession, or are filing for bankruptcy. Why wait? There is no cost to contact LEAP!
Unsure if a 722 Redemption is right for you?
Only you and your attorney can decide the right course of action, but we can give you some things to think about:
- Do you owe more than your car is worth?
- Are your monthly payments too high for your financial situation?
- Is your vehicle in good shape and likely to last while you reestablish credit?
If you answered ‘yes’ to any of the above, it’s worth considering a 722 Redemption or Replacement program. Talk to your attorney about this option!
Why LEAP? Call LEAP today to understand what we can do for you.
- LEAP can help you keep your car or get a different car
- LEAP’s leasing programs don’t require a large down payment
- Reasonable attorneys fees can be financed in the lease
- There is no cost to call LEAP