722 Exemption

[Crazy]

Can anyone give me an example of how the 722 redemption works? I am trying to have a little more understanding...maybe an example or senario?


Thanks

[Crazy]

Bump

[AAAArt]

Do a search of the Forum under "722 redemption" There's been lots of discussion on it. Or go th their web site www.722redemption.com Art

[StaciMM]

If you're upside down on a vehicle, the idea is to redeem it by paying the lender what it is worth now. (Because if you give it back, they won't be able to sell it for what you owe on it.)

[Genenco]

I did some checking for myself...Not that good of a deal. $490 a month now. FMV is $15,000 6 years is only $100 less.

I'm at 15% BTW

But for others, it can be a salvation.

[StaciMM]

There are companies that do redemption loans. (The best alternative is to have a family/friend who can loan you a lump sum-not likely of course.) The APR is high, so you have to compare what you would repay w/ the redemption loan to what you would do to continue your original terms. One benefit though is that your balance goes down, so if you have the ability to pay extra then you get it paid off sooner and save alot of $$ because of the high Apr.

For example, a truck that we ended up surrendering, was worth about $10,300 but we owed $505*41. (It had originally been a 66 month loan, we'd had it nearly 2 1/2 years but we had deferred some payments.) The balance at the time we filed was a little over $17,000, paying it off with payments we would have repayed $20,705. A redemption loan on $11,000 (rounding up for loan fees, etc.) for the same 41 months would have been about $402 per month. We would have repayed about $16,500. More than $4,000 less. If we had kept paying the $505, it would have taken 2 1/2 years to pay off the redemption loan, for $15,000 total repayment. (Saving an additional $1,500 interest.)

Keep in mind our original APR wasn't excellent: 13.75%. In the end though, we decided it was not a good vehicle to keep. Needed tires, a windshield, and brake work. Had minor body damage & was AWFUL on gas.

[Mysocalledlyf]

I'm currently working on a 722 to keep my car...I owe a little over 13k on it, bought it brand new in '03. I got behind on the payments for the first time in BK and they wanted to repo, filed to lift the stay and everything. I really thought I was going to lose my car, get a broke down one, but the redemp. is sooo much better. I talk to them and they told me I could keep my car and it would only be 6k I would have to pay and my payments are $100 cheaper. But the 722 people have to negotiate a price to buy it back from the lender, usually they want a lawyer for this. Also, they gave me the option of buying a car from them instead.

[sassy]

Somehow we never heard about the 722 redemption and our bankruptcy has been discharged. We kept our car but the lender didn't (forgot?) to have us sign a reaffirmation agreement. We're upside down on the vehicle also but wanted to keep it and needed to file chapter 7, not 13. Can we still do a 722 redemption if we didn't reaffirm? We've just kept making the payments but would love to see them go down some.

Thanks

[StaciMM]

Redemption has to happen before discharge.

But, since you didn't reaffirm, you are not bound to keep it til the end. Have you started cleaning up your reports yet? You can look into financing something else. Just go into it knowing what you and don't settle for anything else.

Try to time it so that you take the new vehicle just before your next car payment is due. Call the old lender, and ask them which dealership do they want to pick it up from.

Somehow we never heard about the 722 redemption and our bankruptcy has been discharged. We kept our car but the lender didn't (forgot?) to have us sign a reaffirmation agreement. We're upside down on the vehicle also but wanted to keep it and needed to file chapter 7, not 13. Can we still do a 722 redemption if we didn't reaffirm? We've just kept making the payments but would love to see them go down some.

Thanks