How May I Keep Certain Possessions That I Do Not Want the Trustee to Sell?
If you are required to surrender some nonexempt property that you wish to keep-for example, a car-you may under certain circumstances arrange to buy it back (redeem it) for a price no greater than its current value. For example, if you owe $3,000 on your car, but its market value is only $1,200, you can recover the car by paying $1,200 to the creditor who has a lien on it. In the real world, of course, it may be very hard to come up with $1,200, which must be paid in a lump sum from the debtor's personal assets, not property that has been set aside for the distribution to creditors. Possible sources of funds would include the debtor's post-petition salary, proceeds from the voluntary sale of exempt assets or loans from relatives or friends.
Alternatively, you may reaffirm some debts, if the creditor is willing. By reaffirming these debts, you promise to pay them (usually but not always in full), and you may keep the property involved, so long as you keep your promise.
You have the right to cancel a reaffirmation agreement within sixty days after it is filed with the court or prior to the discharge, whichever occurs later. Reaffirmation is not always in the best interest of the debtor, especially when the reaffirmed debt relates to property worth far less than the debt reaffirmed. Most reaffirmations relate to mortgage loans and the retention of personal property-car, boat, etc.-especially valued by the debtor.
Finally, as for personal property securing a loan, you may simply continue to make payments. The law in this area is not particularly clear, but as a practical matter lenders will often not take action if they continue to receive full payment.
Family Legal Guide
Copyright © 2000, 2002 American Bar Association
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