keep car, then walk away free and clear

[PDXbk]

Anyone know whether you need to proactively seek a 722 redemption (redeeming your car at current market value) in your BK filing, or ask your lender for one? Or will they approach you with the offer?

And is a 722 better than none? 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 (they can't come after me for whatever's left on the loan, because my liability will have been discharged in the bk). That, to me, is better than a new loan, even at market value.

Any thoughts?

[djt]

Right you are about walking away free and clear. The question is whether you are sure you are going to keep the car for the duration of your loan. If that's the case it might be better to reaffirm. It helps your credit because it gets reported as an account on which you mare making payments. But if you are way upside down and want to keep it 722 redemption is probably the best route. The interest rate will be above 20%, but if you're $6-7k upside down it may be worth it, plus your payments get reported on your credit report.

I checked in to 722 with 722redemption.com. They approved me with a loan for $280/month on a replacement vehicle, because I'n not upside down on my vehicle. It wouldn't be worth trading a 5.5% loan for a 20% loan.

Good luck.

[StaciMM]

Keep in mind '722 Redemption' is a term for a filer's right under BK 7, though it is also the name of a company that does redemption loans. If you have a family member, or some other source to get the $$ (I know-not likely else we wouldn't be here in the first place) then that is best.

The lender will not contact you about redeeming-why should they? They're better off if you keep making payments. If you decide to keep it for now, just keep good records of your payments-they will not send statements.

Regarding 722's replacement program, I agree that it is not a good choice if you have other options, such as if you would expect to be able to use your current vehicle long term. We went with it because of issues w/ our current vehicles (maintenance issues, bad gas mileage & high payments on one, wear & tear and balloon payment coming due at the end on the other) and we decided it best to get into something reliable that could last a LONG time.