When you are becoming involved in a Chapter 7 Bankruptcy you will have to present your secured and unsecured debt for bankruptcy consideration. Your secured debt is that which has collateral being held against it by your creditor. For example, this may be the mortgage on your house, or the loan for your car in which case the car is the collateral.
You may be considering redeeming the secured property. What this means is that you are going to pay the replacement value concerning that property to the creditor. The one reason you would want to do this is if you owed lot more on that particular property then what the property is really worth.
Your Houston bankruptcy attorney will explain what redeeming secured property is all about and whether it would be beneficial to you in your particular bankruptcy. If the decision is made that you want to redeem the property, then most likely it will have to be protected by an exemption.
If you are going to redeem the property then you would be buying it back from the creditor in a lump sum payment, and this is classed as the replacement value. Usually the replacement value is less than the amount that you owed on it. You will have to come to an agreement for this with the creditor, and if no agreement can be reached then the courts can hold a valuation hearing and determine the amount.