What are Secured Debts and Redemption?
We handle many Chapter 7, or “liquidation” bankruptcies at our Queens, New York office. In this kind of bankruptcy, an appointed trustee sells a debtor’s non-exempt assets, with the proceeds going to the client’s creditors. The individual’s debt is then eliminated alltogether or drastically reduced. We tell clients that certain exemptions can protect their assets during Chapter 7 proceedings, and that they can also keep certain secured property by paying the replacement value of it to creditors. This approach is especially helpful for people who owe more on their loans than the current value of their property. In this post we go into more depth about secured debts, redemption, and Chapter 7 bankruptcy.