Bankruptcy specialist Leon Bayer answers real-life questions.
It, redeem it“If you will redeem. However if you shall maybe not, tell me…”
A few years back I took away a title loan on my vehicle. I will be preparing on filing for bankruptcy but want to keep my vehicle for work – I will be a paint contractor.
My truck may be worth not as compared to the blue guide price because, it’s covered with scrapes and paint splatters although it’s in great mechanical condition.
May I redeem my vehicle in bankruptcy to eliminate the title loan?
Unfortuitously, you won’t have the ability to redeem your vehicle in bankruptcy. You have another selection for eliminating the lien — “avoiding” the lien. I’ll explain what redemption is and just why you can’t put it to use, and just what avoiding a lien is and why this could meet your needs.
What Is Redemption in Bankruptcy?
So that you can redeem an automobile in bankruptcy, you spend the car title lender the market that is current associated with car. In the event that loan provider rejects your redemption offer, it is possible to register a movement asking the court to look for the value that is current your car and give an order needing the financial institution to simply accept that sum of money. (for more information, see maintaining your vehicle in Chapter 7 Bankruptcy Through Redemption.)
But there are two main catches that are big redemption law that you won’t like.
- You can easily just redeem with a lump sum payment payment; it can’t be done by you installments.
- It is possible to only redeem something that is meant primarily for individual, family members, or household usage.