722 loans??

ekelly4200 · 11-25-2006, 11:16 AM

I have seen them mentioned and today got something in the mail about 722 financing. What exactly is this? jut a subprime lender? Not that I need it. we are holding onto our Jimmy at 9 %.I am sure if I went for an auto loan right now it would be higher. Just curious as to what it is.

**lrprn** · 11-25-2006, 02:58 PM

Quote:

Originally Posted by ekelly4200

I have seen them mentioned and today got something in the mail about 722 financing. What exactly is this? jut a subprime lender? Not that I need it. we are holding onto our Jimmy at 9 %.I am sure if I went for an auto loan right now it would be higher. Just curious as to what it is.

When filing bankruptcy under the new law and money is still owed on a tangible asset like a car that was purchased less than 910 days before filing, a debtor can choose to do one of three things - reaffirmation, surrender, or redemption. 722 financing has to do with the redemption option. (By the way, the "722" comes from 11 US Code, Section 722 which deals with redemption in bankruptcy).

For a good, "non-lawyerese" explanation of redemption, check out the following websites:
http://www.goarticles.com/cgi-bin/showa.cgi?C=234795
http://www.legalhelpers.com/legal_he...edemption.html

Hope this helps!

SinkingFast · 11-25-2006, 03:10 PM

It's a form of Redemption allowed for in the BK Code, 506 (a) (2).

Lrprn gave you a couple of good links that describe the process.

Basically, if you owe more than your vehicle is worth, and you cannot Cram Down the amount you owe, you could be a candidate for a 722 Redemption Loan.

CindyLou · 11-25-2006, 10:49 PM

I would guess that a redemption loan was be at a much higher rate than 9%, BUT depending on how much you can reduce the amount you owe, it may be a better option. For example, if you currently owe $25,000 on your vehicle at 9% but can get the lien holder to accept a lump sum of $13,000 and can get the redemption loan at $16%, it may be better to get the redemption loan. I haven't done the exact calculations, but there would be a break even point somewhere. It would be worth exploring.

brainless twit · 11-26-2006, 02:50 PM

Many companies also do what is called a 722 replacement. If you are surrendering your car in BK and do not have another car, they will sell you one. However, my husband and I looked into this and the interest rate was 24%. The cars were NOT worth the money they were charging either.

We ended up filling out an app through carloans.com and a few dealers were willing to work with us. We got a decent interest rate (11%) considering, and we have a reliable vehicle, so we're thrilled.

sp114 · 11-27-2006, 06:52 AM

I looked into the 722 loan, but the interest rate was 24%. I got approved for a capital one blank check less than two weeks after discharge. The rate is 10.95 %. You might want to check them out if you really need to get a different vehicle.

11-25-2006, 11:16 AM	#1
ekelly4200 Registered User B/F Newbie Join Date: Aug 2006 Posts: 61	722 loans?? I have seen them mentioned and today got something in the mail about 722 financing. What exactly is this? jut a subprime lender? Not that I need it. we are holding onto our Jimmy at 9 %.I am sure if I went for an auto loan right now it would be higher. Just curious as to what it is.
	Dena Ch 7 (Joint) FILED Oct 23 2006 341 meeting Nov 16 2006 DONE!!!!

11-25-2006, 03:10 PM	#3
SinkingFast Registered User B/F Guru Join Date: Jan 2006 Posts: 6,857	It's a form of Redemption allowed for in the BK Code, 506 (a) (2). Lrprn gave you a couple of good links that describe the process. Basically, if you owe more than your vehicle is worth, and you cannot Cram Down the amount you owe, you could be a candidate for a 722 Redemption Loan.
	Filed Ch 7 - 09/06 Discharged - 12/2006 Officially Declared No Asset - 03/2007 Closed - 04/2007 I am not an attorney. My comments are based on personal experience and research. Always consult an attorney in your area to address concerns related to your particular situation. Another good thing about being poor is that when you are seventy your children will not have declared you legally insane in order to gain control of your estate. - Woody Allen...

11-26-2006, 02:50 PM	#5
brainless twit Registered User B/F Newbie Join Date: Aug 2006 Location: Kentucky Posts: 102	Many companies also do what is called a 722 replacement. If you are surrendering your car in BK and do not have another car, they will sell you one. However, my husband and I looked into this and the interest rate was 24%. The cars were NOT worth the money they were charging either. We ended up filling out an app through carloans.com and a few dealers were willing to work with us. We got a decent interest rate (11%) considering, and we have a reliable vehicle, so we're thrilled.
	Filed Chapter 7: 9/29/06 341 Meeting: 11/01/06 Last Day for Objections: 1/01/07 Discharged and closed: 1/03/07

11-27-2006, 06:52 AM	#6
sp114 Registered User B/F Newbie Join Date: Aug 2006 Posts: 35	I looked into the 722 loan, but the interest rate was 24%. I got approved for a capital one blank check less than two weeks after discharge. The rate is 10.95 %. You might want to check them out if you really need to get a different vehicle.
	To err is human. To really mess things up, you need a computer.

Thread Tools
Show Printable Version Email this Page
Display Modes	Rate This Thread
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode	Rate This Thread:

11-25-2006, 10:49 PM	#4
CindyLou Registered User B/F Guru Join Date: Oct 2005 Location: SoCal Posts: 2,295	I would guess that a redemption loan was be at a much higher rate than 9%, BUT depending on how much you can reduce the amount you owe, it may be a better option. For example, if you currently owe $25,000 on your vehicle at 9% but can get the lien holder to accept a lump sum of $13,000 and can get the redemption loan at $16%, it may be better to get the redemption loan. I haven't done the exact calculations, but there would be a break even point somewhere. It would be worth exploring.

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
722	howie789	Chapter 7	0	11-13-2007 05:38 PM
what is a 722?	Iluvres	Chapter 7	2	09-12-2007 09:42 AM
Resources for non-vehicle 722 Redemption loans	spell	General Bankruptcy Talk	2	03-29-2007 02:16 PM
722 Example	StaciMM	Chapter 7	0	12-11-2005 05:13 PM
722 Redemption	kissrawks	General Bankruptcy Talk	0	07-14-2005 11:54 AM