Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

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TITLE 11–BANKRUPTCY

CHAPTER 7–LIQUIDATION

Sub Chapter II – Collection, Liquidation and Distribution of the Estate

Sec. 722. Redemption

  An individual debtor may, whether or not the debtor has waived the 
right to redeem under this section, redeem tangible personal property 
intended primarily for personal, family, or household use, from a lien 
securing a dischargeable consumer debt, if such property is exempted 
under section 522 of this title or has been abandoned under section 554 
of this title, by paying the holder of such lien the amount of the 
allowed secured claim of such holder that is secured by such lien.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2606.)


                      Historical and Revision Notes

                         legislative statements

    Section 722 of the House amendment adopts the position taken in H.R. 
8200 as passed by the House and rejects the alternative contained in 
section 722 of the Senate amendment.


                        senate report no. 95-989

    This section is new and is broader than rights of redemption under 
the Uniform Commercial Code. It authorizes an individual debtor to 
redeem tangible personal property intended primarily for personal, 
family, or household use, from a lien securing a nonpurchase money 
dischargeable consumer debt. It applies only if the debtor's interest in 
the property is exempt or has been abandoned.
    This right to redeem is a very substantial change from current law. 
To prevent abuses such as may occur when the debtor deliberately allows 
the property to depreciate in value, the debtor will be required to pay 
the fair market value of the goods or the amount of the claim if the 
claim is less. The right is personal to the debtor and not assignable.


                         house report no. 95-595

    This section is new and is broader than rights of redemption under 
the Uniform Commercial Code. It authorizes an individual debtor to 
redeem tangible personal property intended primarily for personal, 
family, or household use, from a lien securing a dischargeable consumer 
debt. It applies only if the debtor's interest in the property is exempt 
or has been abandoned.
    The right to redeem extends to the whole of the property, not just 
the debtor's exempt interest in it. Thus, for example, if a debtor owned 
a $2,000 car, subject to a $1,200 lien, the debtor could exempt his $800 
interest in the car. The debtor is permitted a $1,500 exemption in a 
car, proposed 11 U.S.C. 522(d)(2). This section permits him to pay the 
holder of the lien $1,200 and redeem the entire car, not just the 
remaining $700 of his exemption. The redemption is accomplished by 
paying the holder of the lien the amount of the allowed claim secured by 
the lien. The provision amounts to a right of first refusal for the 
debtor in consumer goods that might otherwise be repossessed. The right 
of redemption under this section is not waivable.

                  Section Referred to in Other Sections

    This section is referred to in section 106 of this title.



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Note: For affordable legal assistance The Center For Debt Management highly recommends Standard Legal's Do-It-Yourself Bankruptcy Forms Software Kits. For credit repair services,
the most trusted law firm in America with over 15 years of experience is Lexington Law Firm.

For more bankruptcy help and bankruptcy alternatives, go to Bankruptcy Resources

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Legal Resource Center: United States Code TITLE 11 Filing Bankruptcy Forms Software