What is a 722 redemption?

[concerned]

I have read one of the posts where it discusses this, but I am still confused as to what it is. I am just wondering if it pertains to my situation.

[sunshine08]

If you are upside-down in a vehicle, (owe more than its worth) or want to get in a better or newer vehicle during bankruptcy, they offer vehicles for sale at more of a wholesale price, you may pay more for interest, but they are willing to take the risk. They have a selection of vehicles that are fairly new, low miles, and I beleive that they have/offer a warranty. If the vehicle you are driving fits their criteria, they will do an loan to value. (say KBB value, instead of what you owe on it). They can do a pre-approval, but to do anything other than that they require a case #.

[sunshine08]

We did call them and were approved. They could not do a better payment plan than we had, but it was worth our time to check into it. You never know. I think they finance a longer period, don't remember all the details. But they were very helpful and let you know within about 48 hours or so.
They are extremely helpful. I was impressed.

[concerned]

Thanks Sunshine08! I don't think this will apply to us. We own our vehicles outright, but the values are slightly over our state's exemption so we will have to pay for them. Do we first have to surrender the vehicles or do we just pay the trustee after the 341? It's all so confusing.

[sunshine08]

If the amount is only slightly over the trustee may let it slide. What did you use for the value? KBB or NADA? Does your state have a wildcard exemption, you may could use this? But to answer, I think that the trustee will give you a time frame to pay the monies.Good luck.

[originalhealer]

My understanding of the 722 redemption is that if you are upside-down in your car, you can redeem your car at value and they (722 Redemption Lending) will finance you on the reduced amount.

This allows you to get your car at cost. I guess some companies also offer the opportunity to purchase a different car through them, but I wanted to clarify this.

I had tried to get a redemption loan for my car, but they told me that it had too many miles on it.

I know this doesn't apply to your situation, but I wanted to clear this up for anyone else that may be reading this.

[PDXbk]

Anyone know whether you need to proactively seek a 722 redemption in your BK filing, or ask your lender for one? Or will they approach you with the offer?

We're upside down on our car and we listed it as "neither redeem nor surrender" - which is allowed in Oregon, as long as you're current on payments as we are. I've heard nothing from the lender, one month after filing. If they don't request redemption, then after discharge I can keep the car til it needs replacing, then simply walk away from it without liability - which, to me, is better than a new loan, even at market value.

Any thoughts?

[StaciMM]

PDX-you would need to first determine if you can come up w/ the $$ to redeem (either family/friends, or a redemption loan) then contact the creditor to work out an arrangement. Generally, your attorney would negotiate it w/ them I think, as there is no clear answer to what fair market value is based on.