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Questions and Answers
What is the purpose of §722 redemption?
What is the purpose of §722 redemption?
When is a redemption legally available under §722?
When is a redemption legally available under §722?
What does the ch. 7 debtor have to do to redeem the property under §722?
What does the ch. 7 debtor have to do to redeem the property under §722?
How is a §722 redemption different than a §524 reaffirmation?
How is a §722 redemption different than a §524 reaffirmation?
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Study Notes
§722 Redemption
- §722 redemption allows a debtor to redeem property from a lien or security interest by paying the lienholder the fair market value of the property.
- A redemption is legally available under §722 if the debtor has not reclaimed the property, the trustee has not sold the property, and the property is not subject to a bona fide dispute.
Redemption Process
- To redeem property under §722, the debtor must file a motion with the court, specifying the property to be redeemed, the fair market value of the property, and the amount the debtor is willing to pay.
- The debtor must also tender the redemption amount to the lienholder.
Comparison with §524 Reaffirmation
- A §722 redemption is different from a §524 reaffirmation agreement in that redemption involves paying the lienholder the fair market value of the property, whereas reaffirmation involves agreeing to continue making payments on a debt.
- In a redemption, the debtor becomes the owner of the property free and clear of the lien, whereas in a reaffirmation, the debtor remains liable on the debt.
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Description
Test your knowledge of §722 redemption with this quiz. Learn about the policy of redemption and how it allows debtors to prevent post-bankruptcy repossession of assets such as cars and boats by paying fair market value.
