Question Trying to extend Honda car lease

[AndHereWeAre]

Hi,

We are trying to extend our Honda car lease.

We filed for Chapter 13 in April this year. However, although Honda is listed as a creditor on our filing, the lease was outside the bankruptcy as we planned and have continued to make payments on it, per advice of our attorney.

We wanted to extend the lease as we have done before on leases but they would only agree to a one month extension whereas normally they will extend up to 6 months. Obviously, bankruptcy is the issue.

After speaking with their bankruptcy department, they said that because of CH13, we are "no longer the responsible party" as per our lease agreement so they will not extend further. That's rather confusing being as 1. we have continued to make our full payment directly to them and not via the trustee and 2. if we are not the responsible party, then who is? They gave us some other confusing info as well so we asked to speak with a supervisor but they will not allow us to escalate as it does not meet their criteria to do so, whatever that is.

Has anyone else had a similar experience and/or have any suggestions how we should proceed? We'd really like to keep the lease for now and not try and purchase a car.

Thanks in advance to everyone!

[justbroke]

Welcome to BKForum.

There's nothing you can really do. The lease probably specifies what they contractually are able to do for an extension. You are right that it's 1 - 6 months. My friend, not in a Chapter 13, had to extend her lease and they only did it for 3 months rather than 6. This was during COVID in March. She did end up buying a new vehicle in April (2020) and was able to give the vehicle back to Ford. Of course, she was not in bankruptcy so she had more options, but they were still very weary on a 6 month extension (back in March) when many people were defaulting due to no employment.

I wish your attorney would have said something about not entering a Chapter 13 with a lease (unless the lease exceeded the life of the Chapter 13). It puts you in a bad position. This is no different than entering a Chapter 13 with a vehicle which is more than 10 years old, out of warranty, and/or with mechanical issues. Technically attorneys are not supposed to tell you to "incur" debt just before filing, but I personally believe that this should be in the standard literature.

Ask your attorney if they know of Chapter 13 friendly lenders. You may be able to do something with 722 Redemption (US Bank) as they will work with replacements in some circumstances (even for Chapter 13s).

[AndHereWeAre]

justbroke Thanks