Announcement

Collapse
No announcement yet.

Creditor say “NO!” To lease assumption??

Collapse

Unconfigured Ad Widget

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Creditor say “NO!” To lease assumption??

    I have a lease on a car and wish to assume and/or reaffirm the lease. The monthly payment is affordable and I won’t get anything near as nice or reliable or as economical to operate if I can’t keep it. I’m current on the payments and I’ve never been late, my attorney says he’s never seen a creditor decline to reaffirm a car lease. I was trying to keep my BK as secret as possible and if my car is repo’d, I think I could die from embarrassment and it will cause me problems at work because my employer has a very negative perception of BK filers and car repossession...

    What’s the best way to force or persuade the creditor TO LET ME KEEP PAYING THEM...?

    I have a family member that would prepay the rest of the lease in full and let me pay them back over time, but the creditor says there is no way they will consider letting me stay in the car, I just don’t understand...


    Thanks for any input!




    #2
    Is this a credit union (CU) or a hard-money lender? While it's usually unheard of, the creditor can reject the assumption. Even if you sought leave from the judge (court) to overcome the rejection of the assumption, the creditor could prevail (due to some other reasons of default).

    Why not just buy a new car? What is making this car so special to keep (other than, perhaps, a low payment)? Also, this wouldn't be a repossession. It would be a rejection of the lease... no different an outcome than if the lease period was over and you returned the vehicle.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13, discharged 5/10)
    Chapter 13 Filed (Pro Se) 5/14 (discharged 8/19)

    Visit My BKForum Blog: justbroke's Blog

    I am not an attorney. Any advice provided is not legal advice.

    Comment


      #3
      *EDIT* thanks for your response BTW justbroke.

      The lender is Honda Financial Services. It’s a $37k MSRP Clarity Electric, 20,000 miles per year lease, it gets me into the carpool lane, it is very comfortable and has all the latest driver assistance features. The monthly payment is $199. I drive almost 30k miles per year commuting to work. Before this car, I was paying about $250 per month in gasoline alone oi a paid for economy car that required a lot more repairs and maintenance...

      My attorney says he has never encountered anything like this and he can’t think of a way around it. Are they allowed to refuse against their own best interest without even explaining their reasoning?

      if anyone else has something to add I would really appreciate it! Thanks!
      Last edited by LuckyNumber7; 09-08-2019, 11:31 PM.

      Comment


        #4
        Originally posted by LuckyNumber7 View Post
        My attorney says he has never encountered anything like this and he can’t think of a way around it. Are they allowed to refuse against their own best interest without even explaining their reasoning?
        They will reason that you are in default under State non-bankruptcy law. That's my thoughts. This just doesn't happen that often. Is it a brand new lease? Did you get this lease within the last 6 months? If so, the lender/lessor is likely trying to protect their equity.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13, discharged 5/10)
        Chapter 13 Filed (Pro Se) 5/14 (discharged 8/19)

        Visit My BKForum Blog: justbroke's Blog

        I am not an attorney. Any advice provided is not legal advice.

        Comment


          #5
          It was leased about 2.5 months before filing. The time between realizing that chapter 7 was my best option and filing occurred within a 3 day window, delaying even a day would have made it much harder to qualify for chapter 7. Bankruptcy wasn’t on my radar and I didn’t have the benefit of planning for it. In fact, I have never been late on a payment in my life.

          I just cannot understand why they’re not even open to having the lease paid in full, in advance. I asked my attorney why the trustee would allow this. Isn’t in the best interest of the bankruptcy estate to collect that lump-sum payment and distribute it?

          I understand that just because I want something to be a certain way doesn’t actually make it so. I’m just frustrated, and motivated enough to try to find a way to keep the lease.


          Please keep any any suggestions coming! Thank you!

          Comment


            #6
            Originally posted by LuckyNumber7 View Post
            I just cannot understand why they’re not even open to having the lease paid in full, in advance. I asked my attorney why the trustee would allow this. Isn’t in the best interest of the bankruptcy estate to collect that lump-sum payment and distribute it?
            I'm almost sure it's the timing. They can recover much more of the value now, than taking a risk on you defaulting (again) later. You can't force them to assume the lease, and I'm sure there's no "value" in the lease where you could exercise the Trustee's power to assume a lease.

            Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13, discharged 5/10)
            Chapter 13 Filed (Pro Se) 5/14 (discharged 8/19)

            Visit My BKForum Blog: justbroke's Blog

            I am not an attorney. Any advice provided is not legal advice.

            Comment


              #7
              What if I can prove that they will not resell/lease the vehicle?

              Honda does not “sell” this car, they only lease it with a closed end lease without a purchase option at any point. You cannot find a single used one on the market in the country.


              Comment


                #8
                Originally posted by LuckyNumber7 View Post
                What if I can prove that they will not resell/lease the vehicle?
                It is 100% the right of the lienholder to dispose of property in any manner that they see fit, and for any amount of loss that they wish to or will incur.


                Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13, discharged 5/10)
                Chapter 13 Filed (Pro Se) 5/14 (discharged 8/19)

                Visit My BKForum Blog: justbroke's Blog

                I am not an attorney. Any advice provided is not legal advice.

                Comment


                  #9
                  Originally posted by justbroke View Post
                  It is 100% the right of the lienholder to dispose of property in any manner that they see fit, and for any amount of loss that they wish to or will incur.

                  I’m in California and from what I understand, a vehicle lessor must act in good faith and in a commercially reasonable manner in connection with the disposition of a vehicle


                  https://leginfo.legislature.ca.gov/f...=CIV&title=14.
                  (3) if the holder of the lease contract or lessor elects to retain ownership of the vehicle for use or to lease to a subsequent lessee, the wholesale value of the vehicle as specified in the current edition of a recognized used vehicle value guide customarily used by California motor vehicle dealers to value vehicles in this state, including, but not limited to, the Kelley Blue Book Auto Market Report and the N.A.D.A. Official Used Car Guide, or (4) under all other circumstances, the higher of (A) the price paid for the vehicle upon disposition, or (B) any other amount established by the lessor or the lease contract.
                  (d) (1) The lessor or holder of the lease contract shall act in good faith and in a commercially reasonable manner in connection with the disposition of the vehicle.

                  Comment


                    #10
                    Great news! They agreed to allow the assumption!

                    I called them directly, rather than through my attorney, and asked really nicely if I could keep paying as agreed and also making it known that I would not drop the issue if they would not agree and I would fight their decision even after my BK case was over. And since their was no late payments or default on my end (other than the ipso facto clause on the contract) they would have to explain the business case for their decision, and then I asked again if they would please just send me the assumption agreement. (I was very polite and professional the whole time, I don’t believe in being nasty/rude to people who are just doing their job)


                    I just wanted to update the forum, I will update again if there are any more changes.

                    Comment


                      #11
                      That's great. Sometimes persistence pays off.

                      (As an aside, I think the California law that you posted is related to your liability only. In a Chapter 7 bankruptcy, you would have no liability. This would render that section of the California law moot as to a debtor in a bankruptcy where the debt is dischargeable or discharged.)
                      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13, discharged 5/10)
                      Chapter 13 Filed (Pro Se) 5/14 (discharged 8/19)

                      Visit My BKForum Blog: justbroke's Blog

                      I am not an attorney. Any advice provided is not legal advice.

                      Comment

                      Unconfigured Ad Widget

                      Collapse
                      Working...
                      X