When you file a Chapter 7 Bankruptcy in Kentucky think about redemption or lien stripping if the item has a lien or mortgage:  You have 3 options that must be done in 45 days if the item has a lien in a Chapter 7:

1. Surrender:  You can surrender your car or secured item, and owe nothing.  You may want to replace your auto by buying a different car prior to or after filing.
2. Reaffirm:  If you owe less than what your car or home is worth.  You may want to sign a reaffirmation for your home or car with the bank and continue to pay your current loan with the bank. 
3. Redemption:   If you owe more than what your auto or other personal property is worth you can buy it from the lender by filing a redemption motion with the court under Chapter 7 for it's replacement value.  722 Redemption will often finance an auto.

Personal property such as Cars, Boats, ATV's and Mobile Homes can be redeemed (purchased) from the bank for their replacement value which may be as little as their auction value.  Under Chapter 7 laws, you should only pay the replacement value or amount owed, whichever is less, in a Chapter 7 Bankruptcy. 

The Louisville Kentucky Bankruptcy Manual fully discusses redemptions and reaffirmations in Ky.   Download your free copy or view the PowerPoint presentations.

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