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Definition of Surrender




The right of a debtor in a Chapter 7 bankruptcy to give back secured collateral to a creditor in a Chapter 7 bankruptcy. By surrendering the collateral to the creditor in bankruptcy, the debtor satisfies the debt and cannot be pursued for a deficiency balance. Certain exceptions may apply.

The right of a debtor in a Chapter 13 Bankruptcy to give back the secured collateral to a creditor.  If you financed a house, car, boat or motorcycle the lender will typically have a lien on the item until the debt is paid.  When you surrender the collateral the lender can then sell it and make a deficiency claim in your case.  Certain exceptions may apply.

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Posted June 2015