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Surrendering assets in bankruptcy
Cathleen Cooper Moran

Q. 

How long does a bank have to recover collateral after a bankruptcy has been discharged?

-- Todd

A. 

Your question touches on one of the most frustrating issues in consumer bankruptcy: getting the creditor to pick up its collateral.

There is no deadline in the Bankruptcy Code. Most diligent creditors want to get their collateral back quickly.

For creditors who don't act to take possession of their goods, some attorneys ask the court to approve a redemption of the collateral for $1, or ask for an order voiding the lien, so the debtor can use and sell it, if the creditor doesn't want it.



-- Cathleen Cooper Moran

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