Can a Creditor be forced into a reaffirmation or agreement to allow me to keep property in a Chapter 7? Can a Creditor be forced into redemption?
No, a Creditor can’t be forced into a reaffirmation or workout. A Creditor can be forced in redemption. If the bank does not agree to a workout, it will usually take a large loss from selling the vehicle at an auction, or the house in a foreclosure. It may even violate federal lending rules by refusing to workout a home mortgage. A bank is able foreclose or repossess, regardless of whether you are in a bankruptcy. If they have started a foreclosure, the filing of the bankruptcy stops the foreclosure but, in a Chapter 7, the bank may file a motion with the Bankruptcy Court and ask to foreclose anyway. If a Chapter 13 offers a good repayment plan, the Court will not approve any foreclosure. If the bank is adamant that it wants the house or car back, it may do so in a Chapter 7 and take a loss. Normally, the bank will rethink their decision and give you one more chance to make payments, but no one can force them to. A redemption is an agreement to pay the bank what the security is worth i
