What is a 722 redemption? and How does it work?

[tiredofdebt]

What exactly is a 722 redemption. I have a car that i am still making payments on. I have 8900 left on the loan....it is worth around 3500-4000. Should I go ahead and keep the vehicle? or should I include it in the bankruptcy?

[sofarindebt]

My advice

It is included in your bankruptcy automatically. Whether you choose to reaffirm and keep making payments is up to you. It is not wise, however, if you are upside down on the car. I would make a lump sum offer for it, that is what we did, we really low-balled them and they took the offer.

[SinkingFast]

722 refers to the Section of the Code that allows for Debtor/Filers to replace/finance a vehicle during BK.

In most cases, you'd be surrendering a vehicle to purchase another. The payments would be about the same so your budget would not be impacted.

Generally, your attny has to agree that the purchase would not cause any undue financial hardship on you. The Trustee and, I believe the BK Judge, also "sign off" on the deal too.

[freshstart06]

We did that loan but we opt to replace the car. You have to make sure there is no down payment or that could cause problems with your BK. The loan is basically to put you in a better situation either to refinance your car or replace a car that is old and going to die but you still have at least another year to pay it off.

Our payments only went up $50 dollars but no down and a car that actually works

[Boscoe]

yeah, try to low ball them. Like $2k, in 8 payments of $250 each or something lower that you can afford. Have you had the car for 2.5 years? If so, you can "cram down" the outstanding debt to the current market value of the car. Use Edmunds.com for this, as I have found kelly blue book comes out higher.

[freshstart06]

I had my car for about 2 years and my car finance company would not work with me. I mean it is a 1997 Nissan Quest with 140K miles and they wanted all their money so I went and got another car and after so many months of good payments they reduce the interest rate. I will be calling them to come and get it, it will not even pass the emission test without some kind of engine work. It just wasn't worth it. I would end up having to purchase another car anyway. I prefer now because of no down payment option you get while in BK.

[SinkingFast]

yeah, try to low ball them. Like $2k, in 8 payments of $250 each or something lower that you can afford. Have you had the car for 2.5 years? If so, you can "cram down" the outstanding debt to the current market value of the car. Use Edmunds.com for this, as I have found kelly blue book comes out higher.

If you've had your car loan in excess of 910 days, you can negotiate a FMV pay off with the Lender. Or "cram down" what you owe. That's how it was referred to under Old Law.

New Law does not allow for "cram down" unless you meet the 910 day rule.

[sofarindebt]

well how would that work for us then?

The car was leased and we bought out the lease at the end of '04. We did not do any of this through our bankruptcy. She simply told me they can't repossess until after our discharge, so I said "what if I made you an offer after our discharge?" she said to write them an offer, so I did, and they accepted.

[tiredofdebt]

i got the car oct 05

[tiredofdebt]

i pay 308 a month.....do i have to get an older vehicle using the 722.....i cant wait to meet w/ my lawyer...

[dover]

So if you are going to put the car on the chopping block but might want to try and low ball them, should you keep making payments?

[SinkingFast]

So if you are going to put the car on the chopping block but might want to try and low ball them, should you keep making payments?

For Ch 7,...............

If you're gonna try to negotiate,......... You'd probably need to be current on your payments.

If you're in arrears when you file, the Lender will simply file a Motion to Lift Stay to repo the car.

Ch 13 is a whole different ball game. Your attny could negotiate a reduced pay-off while including your arrears in your Plan.