Vehicle lease will expire while in BK13. What to do?

[JasonK94Z]

Our family vehicle lease will expire in just under 3 yrs from now. If I am about to file Chapt 13, what will I be able to do for a new family vehicle while in BK13??

Is there something I can do beforehand to help out?

[lrprn]

Our family vehicle lease will expire in just under 3 yrs from now. If I am about to file Chapt 13, what will I be able to do for a new family vehicle while in BK13??

Your car lease *cannot* be paid through your Chapter 13 Plan because a leased car is not a secured loan. You can state your intention to continue the lease and make the monthly payments. You can also reject the lease and return the car to the creditor.

The creditor will then sell the leased vehicle, apply the sale proceeds to your lease balance and then file a claim in your Chapter 13 bankruptcy case for the lease deficiency. This deficiency is an unsecured, non-priority claim, which means you will only pay that creditor the same payback % for all your other non-secured creditors like credit cards.

Finding acceptable financing for a reasonable used car purchase while your Ch 13 is active will be difficult. Even if you can get a lender to work with you, you will pay a high interest rate - probably in the range of 16-19%.

This is tough, I know. Keep asking questions and vent any time you need to - that's why we're here.