What does redeeming collateral mean?

What does redeeming collateral mean?

Redemption means that a secured debt on some secured collateral (e.g., car, boat, trailer, furniture, etc) can be paid off completely by paying the loan to the fair market value of the collateral, rather than the full loan balance. In the process, the debtor can save literally thousands of dollars.

Is your intent to retain the property?

Retain: You tell the court you want to keep the property. You may have to pay some or all of the debt that goes with the property. If you want to retain the property, you must tell the court how you will pay the loan on it.

Do you have to redeem debt in Chapter 7 bankruptcy?

If you file for Chapter 7 bankruptcy and want to keep property that is encumbered by a secured debt (such as a car loan), you typically have to reaffirm the debt or redeem the property. Read on to learn more about the difference between reaffirming debts and redeeming property in Chapter 7 bankruptcy.

What kind of property can you redeem in bankruptcy?

Personal property is all property other than real estate. You won’t be able to redeem your residential home or vacation house. The property is tangible. You must be able to touch the property. Intangible property includes things like investments, stocks and bonds, and intellectual property rights. The property isn’t of value in the bankruptcy case.

Can a chapter 13 debtor redeem sold real property?

The court observed that the issue of whether a Chapter 13 debtor can redeem real property sold in a tax sale through a Chapter 13 plan has created a split in the district and across the country.

Can a secured property be redeemed in Chapter 7?

In Chapter 7, you can buy or “redeem” your secured personal property at a discount by paying its current value, not the amount you owe. This option can save you quite a bit if you owe substantially more than what the property is worth, and the property meets these requirements: you can pay its current value in a lump sum payment.

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