What Is Redemption?
Redemption allows an individual debtor (not a partnership or a corporation) to keep tangible, personal property intended primarily for personal, family, or household use. The debtor must pay the holder of a lien on the property the amount of the allowed secured claim on the property, which typically means the value of the property. Otherwise, in order to retain the property, the debtor would have to pay the entire amount of the secured creditor`s debt, do a reaffirmation agreement and become legally obligated on the debt again. The property redeemed must be claimed as exempt or abandoned. With redemption, a debtor can often get liens released on personal household possessions for much less than the underlying debt on those secured possessions. Unless the creditor consents to periodic payments, redemption must generally be made in one lump sum payment to the creditor.
Redemption allows an individual debtor (not a partnership or a corporation) to keep tangible, personal property intended primarily for personal, family, or household use by paying the holder of a lien on the property the amount of the allowed secured claim on the property, which typically means the value of the property. Otherwise, in order to retain the property, the debtor would have to pay the entire amount of the secured creditor’s debt or enter into a reaffirmation agreement and become legally obligated on the debt again. The property redeemed must be claimed as exempt or abandoned.
Redemption allows an individual debtor in a Chapter 7 case to keep tangible, personal property intended primarily for personal, family, or household use, by paying the holder of a lien the lesser of the amount of the lien or the value of the property. Redemption is an alternative to reaffirmation. The property redeemed must be property that is exempt or that has been abandoned by the Chapter 7 trustee. With redemption, a debtor can often get liens released on personal possessions for much less than the underlying secured debt; however, unless the creditor consents to periodic payments, redemption must generally be made in one lump sum payment to the creditor. If the debtor and creditor agree to the redemption, just a consent order of redemption is required. However, if the redemption is opposed, a motion for redemption and a request for hearing should be filed. As with reaffirmation, the Bankruptcy Code imposes certain deadlines by which the debtor must seek redemption of his or her pr
Redemption allows an individual debtor (not a partnership or a corporation) to keep tangible, personal property intended primarily for personal, family, or household use. The debtor must pay the holder of a lien on the property the amount of the allowed secured claim on the property, which typically means the value of the property. Otherwise, in order to retain the property, the debtor would have to pay the entire amount of the secured creditor’s debt, do a reaffirmation agreement and become legally obligated on the debt again. The property redeemed must be claimed as exempt or abandoned. With redemption, a debtor can often get liens released on personal household possessions for much less than the underlying debt on those secured possessions. Unless the creditor consents to periodic payments, redemption must generally be made in one lump sum payment to the creditor.
