What Is Redemption?

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What Is Redemption?

Redemption allows an individual debtor (not a partnership or a corporation) to keep tangible, personal property intended primarily for personal, family, or household use. The debtor must pay the holder of a lien on the property the amount of the allowed secured claim on the property, which typically means the value of the property. Otherwise, in order to retain the property, the debtor would have to pay the entire amount of the secured creditor`s debt, do a reaffirmation agreement and become legally obligated on the debt again. The property redeemed must be claimed as exempt or abandoned. With redemption, a debtor can often get liens released on personal household possessions for much less than the underlying debt on those secured possessions. Unless the creditor consents to periodic payments, redemption must generally be made in one lump sum payment to the creditor.

Other Your Assets and Bankruptcy FAQs

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A: Not necessarily, each state has laws that determine which items or property are exempt from being taken away. For example, many states exempt personal items such as … More
Q: Will I Be Required To Sell My Assets?
A: Yes. A lot of your property which is deemed a necessity will not be released, but filing bankruptcy (under Chapter 7) will often require you to give up certain types … More
Q: Cant I Just Transfer My Assets To A Friend Or A Living Trust Before I File For Bankruptcy?
A: These types of transfers may be considered fraudulent and your Chapter 7 trustee may be able recover the property within a year of filing. Factors will be … More
Q: What Are Exemptions?
A: 11 U.S.C. º 522(b) allows an individual debtor to exempt real, personal, or intangible property from the property of the estate. State law protects exempt assets … More