Section 722 of the United States Bankruptcy Code provides consumers with an interesting option when they owe more on a vehicle than the vehicle is worth. Consumers can redeem the vehicle by paying the lender the value of the vehicle rather than the amount of the loan and allowing the bankruptcy to discharge the old loan. A catch to the process is that the payment to the creditor must be paid in one lump sum.
The one payment requirement can be a problem for someone who is filing a bankruptcy. Many people have a hard time finding a lender who is willing to lend them the money needed to pay the old lender while they are in an active bankruptcy. 722 Redemption offers a unique solution to this problem. 722 Redemption is a company that offers to refinance loans on vehicles for people who are going through bankruptcy. They will value the vehicle and determine if the borrower qualifies for a loan. If the consumer qualifies, 722 Redemption will refinance the vehicle for the value of the vehicle.
One benefit of redeeming a vehicle is that the original lender does not have a choice in the matter once the Court approves the redemption. This can be very helpful when dealing with credit unions that cross-collateralize all debt on any assets that the consumer has with the credit union. Credit unions have been known to refuse the release of the title to a vehicle once the vehicle is paid if the debtor had any other debt with the credit union (e.g. credit cards, signature loans, other surrendered vehicles, etc.) that were discharged in the bankruptcy. This leaves the consumer in a difficult situation. Redemption solves this problem by providing the consumer with a court order that proves that the old lender no longer has any interest in the vehicle.
The Orlando bankruptcy lawyers at Cleaveland & Cleaveland, P.L. recommend that anyone seeking to redeem their vehicle speak with bankruptcy counsel for further information. Please contact our office at (407) 893-5200 to schedule a free consultation or visit www.cc-lawoffice.com.