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Keep and Pay

Keep-and-pay is a debt strategy employed by individuals who have declared bankruptcy in order to retain possession of certain assets that require monthly payments. It is an attractive option to those who do not want to relinquish possession of their assets, but is not always an option in all cases.

Under the bankruptcy code, individuals who have declared bankruptcy may have the option to re-acquire certain assets they had previously held prior to declaring bankruptcy. This includes anything that may have been surrendered to the court in order to receive a discharge. The primary benefit of this strategy is that the individual can keep their asset and be allowed to continue making payments on it.

In order to use the keep-and-pay strategy, the individual filing for bankruptcy must demonstrate to the court that they are capable and willing to make payments towards the asset in question. If the payments are accepted by the bankruptcy court, the individual can proceed with the keep and pay strategy. Depending on the jurisdiction, the payment plan, as well as the interaction between the individual and creditor, can vary.

One of the benefits of the keep-and-pay strategy is that it helps individuals ease back into their financial obligations with a manageable payment plan, resulting in creditors being more likely to forgive some of the debt rather than trying to claim the asset in full. Additionally, the creditors may be more willing to work with the individual, as it helps relieve the situation without risking their investment.

It is important to note that keep-and-pay may not be available in all cases. Laws and regulations aside, determining whether or not a creditor will willingly allow a debtor to keep and pay on an asset takes creditor action and negotiation. That said, keep-and-pay is still a viable option to aid individuals looking to keep their assets while also trying to find financial relief.

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