There’s a Power in a Chapter 7 Called a Redemption
Video Transcribed: Oklahoma Bankruptcy Attorney Edward Kelley here, answering your bankruptcy questions with oklahomacitybankruptcyattorney.pro. There we go. So today, I’m going to do a special little video about a little COVID-19 bankruptcy opportunity. If you file now, that may be really helpful to you.
Because of the stimulus, maybe a second round or the SBA loans or Paycheck Protection Program, if your income has gone down or if you’re below the cutoffs for Chapter 7, which again, you’re in the 40s for one person, you just figure, add about 9,000 on top for each other member of your household, the gross income, you fit in there now, and you’ve got a car note and you owe a lot more than what it’s worth. There’s a power in a Chapter 7 that isn’t used a lot, but it’s quite something, and it’s called a redemption.
You can redeem your car. So let’s say that it’s worth 5,000 and you owe 10,000. You want to keep it. If you can somehow come up with that $5,000 after the filing of the bankruptcy, you can just pay the creditor that car. You can exercise what’s called that power to redeem, have it paid off and have no loan.
So the thing with COVID-19, because of these stimulus checks, which the bankruptcy court is not taking an interest in, in which may give you some unexpected income after your filing, you may have enough to do it, depending on what your car is worth. Just go to Kelly Blue Book, put the condition of your car, get an idea of what the Blue Book is.
Especially if you’ve got one of those Paycheck Protection Loans and SBA loan, something where you’ve got some unexpected money in your pocket. And maybe your situation is improving.
You’re able to carry yourself on your regular income. Exercise that power of redemption. Again, say you owe 10,000. Well, actually, let’s get more realistic. Let’s say you owe 5,000 on a car that’s worth 1,500. So you filed bankruptcy.
You’re talking, thinking about reaffirming that note for the whole 5,000, which you will then not be discharged on and have to pay off, and you can’t file another 7 for eight years. Or let’s say then, your stimulus comes in for 1,200. You’ve got an extra 300. You can, in your bankruptcy while it’s going on, redeem.
You can pay that 1,500 in, have that car free and clear, save yourself $3,500 and no more car payment. So that’s the power of redemption. If you’re possibly in that situation, give me a call. (580)-478-3130