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

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Written by Kristin Turner.  
Updated August 19, 2019

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"Redeeming" your car means that you buy it from the lender that you financed it with for the fair market value of the car in one lump sum.

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.

If you would like to learn more about redeeming your car during bankruptcy, check out this article. 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.

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Upsolve is a 501(c)(3) legal aid nonprofit that started in 2016. Our mission is to help low-income Americans in financial distress get a fresh start through Chapter 7 bankruptcy at no cost. We do this by combining the power of technology with attorneys. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have mission-driven funders that include the U.S. government, former Google CEO Eric Schmidt, and private charities.

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