Redemption

[journey]

Ok i have a questin about a Redemption.i sure would appreciate any in put.

I had my 341 meeting on dec,08. i had a piece of land with no house and the trustee put a 10 day stay on it.

I talked to the Credit Union friday and they told me there would be no Forecloser if i continued paying on time.

I am up side down on the land but would really like to keep it i was wondering how i could go about asking for a "Redemption" is this something i could ask the Credit Union or do i need to get the attorny in volvled.

I was thinkg maybe i could ask the Crediet Union if they would take the True Value for the land instead of the amount i owe and i would continue payin.

Thank you,

[jribe]

Where is the land? I don't think most banks/cu's would reduce the loan amount; because land doesn't really depreciate that much. Unless something major (in a bad way) happened nearby since you bought it.

[journey]

I went in the Credit Union back in Sept.2007 and said i was wanting to get a loan the lady said do you have any thing that would stand for the loan. I told her a had some land she loaned me 60K. alot more than what its true value is.

So im upside down on the property i would like to keep it. I was wondering if i could do a Redemption and pay them the true value instead of what i owe.

So what im saying if the land wasnt worth the 60K but she let me borrow that much would that help me get a Redemption.

The Credit union had a attroney at my 341 meetin he wanted to know what i done with the 60K i told him i spent some and loss most of it in the stock market.

Thank You.

[TEW]

I did a Redemption on my wedding ring. they wanted 600 to pay it of or return it. I told them i would give them 100 and redeem it. they excepted. I'm not sure how it works witht he CU but my lawyer did all the paper work.
I did get real prices for the ring before i made the offer.

[Genenco]

I think (Taking the banks position) I'd look at area, possible building outlook and location.

Most likely, I'd tell you to fork over, or lose it. If it's in a depressed area (I actually am buying land in a semi-remote area..Love it, wish I'd had been told about it earlier) that "Might" lead them to consider reduction, but most likely they'll stand fast and say "Pay it or lose it"

You see, a car or even a house can lose major value (as we have witnessed here) but raw land...That's a different kettle of fish. While basic value may take a hit, it's the "Future" value that affects the banks actions...And they probably wouldn't mind holding onto it for the future.

BTW how many acres??

[TEW]

I think (Taking the banks position) I'd look at area, possible building outlook and location.

Most likely, I'd tell you to fork over, or lose it. If it's in a depressed area (I actually am buying land in a semi-remote area..Love it, wish I'd had been told about it earlier) that "Might" lead them to consider reduction, but most likely they'll stand fast and say "Pay it or lose it"

You see, a car or even a house can lose major value (as we have witnessed here) but raw land...That's a different kettle of fish. While basic value may take a hit, it's the "Future" value that affects the banks actions...And they probably wouldn't mind holding onto it for the future.

BTW how many acres??

[journey]

Thanks for Replies... the Credit Union gave me a line of Credit for 60K using the land as colleteral and the tax appraisaul is 15,700


so im underwater big time.the trustee put the forecloser on it but the CU said as long as the payments were made there wasnt going to foreclose.

I have had this property for 20 years at first i was willing just to pay the payments and keep it but now i no as long as i keep it i wont never get back on my feet unless they would do the Redemption.

So i guess i will go talk to them maybe if they see im thinking of letting the have it they may be willing to work somehting out.

[Genenco]

Thanks for Replies... the Credit Union gave me a line of Credit for 60K using the land as colleteral and the tax appraisaul is 15,700


so im underwater big time.the trustee put the forecloser on it but the CU said as long as the payments were made there wasnt going to foreclose.

I have had this property for 20 years at first i was willing just to pay the payments and keep it but now i no as long as i keep it i wont never get back on my feet unless they would do the Redemption.

So i guess i will go talk to them maybe if they see im thinking of letting the have it they may be willing to work somehting out.

HOLY SH*T 60K for $15K???

If they don't fire the person who gave you the loan, I'd be VERY surprised..That's just incrediable!

And yeah..They may not want that land, due to the low value, but still, it's truly worth talking to them about...

Hey, maybe they take it, try and sell it and you bid and get it for less? Stranger things have happened...

Man, reminds me of the guy who got BofA bank manager to loan 95% on a business purchase. Yep he got fired for that, the business? Going good last time I was there, increased by 8 fold..So was good fortune...

[journey]

I found this site about Redemption thought i would post it for any one thinking about Redemption.

http://www.uslaw.com/library/Bankruptcy/Redemption_bankruptcy.php?item=12763

Redemption is a process that is sometimes misunderstood. Redemption is the process of paying a lump sum payment to a secured creditor (lienholder) in exchange for the release of the lien. In Chapter 7 bankruptcy, a debtor can use 11 U.S.C. Section 722 to pay only the fair market value for the collateral, not the contractual balance.

Usually this situation arises when a debtor is financing a vehicle. Vehicles depreciate. Sometimes they depreciate rapidly. Most people I counsel owe more on their vehicles than what the vehicles are worth. Through the redemption process, a debtor could save thousands of dollars on principal and interest payments because the debtor only has to pay the “value” which is usually less than the “balance” on the loan. For example, if the debtor’s car is worth $10,000, but the debtor owes $15,000, the debtor could use the redemption process under chapter 7 bankrutpcy and force the creditor to release its lien after receiving only $10,000.

It is important to realize that there isn’t a redemption process in chapter 13. This is only something that can be done in chapter 7. The “catch” in the process is that most debtors I counsel don’t have a lump sum of money equal to the value of the vehicle they can pay at once. Some debtors might be able to get the money from friends or family or borrow from a retirement asset, but even for those debtors who don’t have sources of cash, redemption is possible.

Believe it or not, debtors can sometimes borrow the money to fund the lump sum payment needed to redeem. There are finance companies that offer financing for debtors in these specific circumstances. While it may be true that these finance companies charge higher than average interest rates, depending on the value of the car and the terms of the original loan, these transactions can be very beneficial for debtors and still result in thousands of dollars of savings over the life of a loan and significantly lower vehicle payments each month.

If you’re in this situation, make sure any attorney you choose knows about this process and can offer representation regarding this process in chapter 7. It could save you thousands of dollars on top of what you are eliminating in medical, credit card and other unsecured debt!


Full post as published by Consumer Bankruptcy Blog from Legal Helpers on April 06, 2007 at