This topic covers surrender of collateral by a borrower.
Table of contents for this topic:
- Creditor acceptance
- Practice pointers
- See also
Creditor refuses surrender – bankruptcy. If the creditor refuses to accept surrender in a Chapter 7 bankruptcy consider a redemption (11 USC 722) for $1.
Creditor refuses surrender – Wisconsin. In a transaction covered by the Wisconsin Consumer Act, consider enforcing Wis. Stats. § 425.204(1), giving the consumer the “right” to surrender.
Creditor refusing surrender may violate the discharge. In re Pratt, 462 F.3d 14 (1st Cir. 2006) (creditor’s refusal to release its valueless lien so that vehicle could be junked was “coercive” in its effect, and thus willfully violated the discharge injunction). Note that the decision in In re Canning, 462 B.R. 258 (B.A.P. 1st Cir. 2011), distinguishes Pratt in the process of ruling that a creditor does not violate the discharge by refusing to foreclose.
- 11 USC 521(2) – obligation of debtor in bankruptcy to redeem, reaffirm or surrender