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I want to redeem my car. When do I do it?

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In a Nutshell

"Redeeming" your car means that you buy it from the lender that you financed it with for the fair market value of the car, paid to the lender in one lump sum. The rest of your loan is discharged.

Written by Kristin Turner, Harvard Law Grad.  
Updated July 22, 2020

"Redeeming" your car means that you buy it from the lender that you financed it with for the fair market value of the car, paid to the lender in one lump sum. The rest of your loan is discharged.

If you would like to redeem your car, you must:

  1. let the bankruptcy court and the lender know on your "Statement of Intention" forms,

  2. file a motion with the court proving the value of the car after you file your bankruptcy, and if the motion is approved, pay the lender the redemption value (fair market value) of your car and have the title released to you.

  3. the rest of the balanced owed is dischargeable

Your approved redemption agreement will specify how much time you have to pay the lender (usually 90 days). Failure to pay on time may result in your car being repossessed and/or your bankruptcy being denied.

What you choose to do with your car in your bankruptcy is entirely up to you, and a choice that made sense for someone else may not make sense for you. We at Upsolve do not recommend any particular way forward, but we hope that this article and others we have written on the topic of secured debt gives you the tools you need to make an informed decision.

Written By:

Kristin Turner, Harvard Law Grad


Kristin is a recipient of Harvard Law School’s Public Welfare Foundation A2J Tech Fellowship. At Harvard Law, she served as a member of the Harvard Defenders, the Women’s Law Association, and the Harvard Law Negotiation Review. She was the 2016 – 2017 president of the Harvard Bla... read more about Kristin Turner, Harvard Law Grad

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