Bankruptcy Cash Outs To Protect Collateral

The safest way to protect collateral after filing bankruptcy is based on the right of redemption. To use the bankruptcy cash out option, creditor permission is not required, however the court must approve all transactions. The essence of a bankruptcy cash out is to redeem - or pay off - a lien by extinguishing the underlying note.

Full payment of the note is required in exchange for a full and final release of lien. The right of redemption cannot be waived, despite prior signed agreements.