SAN DIEGO, and CINCINNATI — An auto leasing company who serves consumers having difficulty obtaining credit and 722 Redemption Funding — a provider of vehicle financing for customers filing Chapter 7 bankruptcy — are teaming up to offer redemption and replacement financing for these very same customers.

The two companies note that since both 722 Redemption and LEAP Financial “work closely with debtors and debtor attorneys to offer auto financing options for customers filing for bankruptcy. this partnership leverages the strengths of both companies to help a larger number of customers maintain their vehicle during their bankruptcy filing.”

Giving some background on the issue, the U.S. Bankruptcy Code allows consumers to “redeem” their vehicle by paying fair market value for the vehicle in one lump sum.

This is especially important since analysts estimate that more than 1.3 million consumers filed for bankruptcy during 2011.

Commenting on the new partnership, Tim Condon, chief executive officer of LEAP Financial, said, “In a Chapter 7 bankruptcy, consumers have three options regarding their auto debt: reaffirm the debt, surrender the vehicle or redeem the vehicle.

“If the debtor can afford to make the payment on their auto debt, it makes sense to consider a reaffirmation, paying the current lender the agreed terms of the auto debt. Depending on the value of the vehicle, however, a better alternative could be to surrender or redeem the vehicle. When filing bankruptcy, debtors should work with their attorneys to understand their options and ensure they pursue the right decision for their financial situation and vehicle,” he continued, noting the potential advantages of redeeming a vehicle," he continued.

“722 Redemption’s access to consumers and bankruptcy attorneys, combined with LEAP’s ability to finance credit-challenged customers, gives more debtors the ability to pursue their auto options.

“We are excited to partner with 722 Redemption to serve these consumers,” Condon concluded.

Executives from 722 Redemption Funding also offered their take on the news.

“Our partnership with LEAP gives us the opportunity to broaden our geographic reach and offer financing to consumers where we are not operating today,” said Brad Zappin, chief operating officer, 722 Redemption Funding. “In addition, it allows us to reach potential consumers who would not previously have been approved for financing.

"This is great news for consumers and their attorneys who are considering alternatives for handling their auto debt during their bankruptcy proceedings,” he added.