Toyota Lease - IIB - long after discharge claims didn't know of BK

[Charlie777]

I have a leased Camry Hybrid, Chapter 7 filing (filed 8/11/2009, discharge granted 11/23/2009) stated I would keep the car and continue payments (never delinquent at filing). The Statement of intention listed the debt as both a secured debt (retain property, continue making payments withou reaffirming), and a lease (lease will be assumed).

I have a service that lets me see my credit scores and reports monthly, and notifies me of activity. My credit reports have all continued to reflect monthly payments and paid as agreed status on the lease, until Toyota Finance reported the lease as IIB in April 2010.

I spoke with them Friday, and their position is that the notice of bankruptcy was sent to the "wrong" address and they "just" learned of the filing, so they are "required" to treat this as a discharged BK. Because I didn't sign an assumption agreement, even though I filed notice that I would assume the lease in the Chapter 7 petition, they will not report my payment status.

The car is in great shape and only slightly "upside down", and under on lease mileage. I had intended to keep paying it out and execute the buyout in December 2012 to keep it another 3 or 4 years. The payment is over $700/month. But if I won't get the payments reported to help rebuild my credit I have to seriously consider turning it in and getting a "beater" to drive (good thing I drive low mileage). Take a small loan to buy it, or borrow against it after purchase to get payments reported to rebuild credit.

Questions:

Is an assumption agreement really required? Why isn't the statement of intent in the filing sufficient?

If required, is the assumption agreement subject to the same requirement for court approval prior to the discharge that would apply to a reaffirmation?

Does the law really require the car companies to stop reporting payment status post-discharge if loans / leases aren't reaffirmed, or is this something they do to try to pressure debtors to reaffirm (which debtor attornerney's recommend against)?

Does anything prevent Tpyota Finance from selling me the car and financing the sale if we can negotiate a purchase price and loan terms?

[HHM]

Sorry to say, they are absolutely correct.

Don't worry about it, allow it to be IIB. It is not worth assuming the lease and creating more financial risk for what amounts to only a token benefit on your credit report.

As to your questions specifically,

1. Statement of intent is simply that, a statement of intent, until it is formalized with an actual agreement (reaffirmation, assumption, etc) the statement of intent is meaningless.

2. Don't remember, but I wouldn't bother doing this in the first place.

3. The law requires reporting creditors to be accurate and complete.

4. Toyota could do that, you would be creating a new transaction at that point no subject to the BK.

[Charlie777]

Thanks for the quick reply...

I guess my heartburn is with saying that failing to show current and timely payments post-discharge meets the legal requirement for reporting creditors to "be accurate and complete". I guess if the IIB report is absolutely the last report, and I can now go back to the CRA and force them to re-date it to 11/2009 (the month of discharge) that's the best I can hope for.

[HHM]

Correct, you should dispute the account with the CRA.

The general reason why continued payments after BK on an IIB account are not tracked and required to be tracked is this.
The debt is no longer a live debt, the debt was discharged in BK. Thus, everything up to the point of filing BK is allowed to be reported (because it is accurate and complete, you had the account, you made (or didn't make) payments etc. Once you filed BK, you killed your personal liability, there is no more debt, per se. Thus, in a legal sense, there is nothing to report past the BK.

For the sake of example, lets take a regular car loan (a car lease is more complex to explain). Your credit report is a record of your personal debts. When you take out a car loan, you are doing 2 things, (1) creating a security interest in the vehicle for the benefit of the lender, and (2) taking out a loan for which you are promising to repay. The BK discharges the loan (#2), but does not affect the security interest (#1). YOUR CREDIT report is ONLY a record of your loans, not a record of the security interests against your vehicle. In essence, by continuing to pay on a secured loan after BK, all you are doing is preventing the bank from exercising its security interest, there is no live debt that is something that is reportable to the CRA's.