Auto Lease Surrender-Ramifications?

[whoops08]

We filed today for CH. 7. I called the company that we have an auto lease through and told them that we would like to arrange to surrender our vehicle. We are two months past due. They put me on hold and then an very angry man came on the phone and asked why we are thinking of surrendering. I told him that we are not thinking about it we needed to do it due to a bankruptcy that we filed today. He then said that there are serious ramifications to this and that they would sue us for the difference in amount that the car is auctioned for vs. what we owed on it for the remainder of the lease (9 months left)

I told him that I could not discuss this with him and that he should contact my attorney. I said that I was just making them aware of what I was intending to do and that we needed to agree on a drop off location.

Can they sue us for the difference? We are including 2 cars in our BK, one lease one with very upside down loan.

Thank you!

[cool33097]

No if you include them in your bk.

[CH33 Paralegal]

hahahahaha.....what a lame on the phone...not you, the car guy.

It's an auto deficiency at that point and treated as a general unsecured claim.....it gets the same treatment as a credit card.

remember, a chapter 7 is a "fresh start" and even if they dont' sell the car until after your discharge, the deficiency is still treated through the 7 as an unsecured claim.

[AngelinaCat]

We were being sued for the difference for a car that we turned in--that we didn't even own! Long story short: NEVER EVER, not EVER co-sign a note with ANYBODY. We included the difference in our 7. According to the CR it has been charged off.

[Help!]

Don't let them rattle you. If it's discharged through your BK, they can rant and rave all they want but they have no way of making you pay the deficiency. Next time someone's being angry and threatening about a debt that's being discharged, laugh out loud... they hate that.

[liz417]

They are bluffing, you know with the economy the way that it is, people are surrendering/losing their cars/homes all over. I think it was very nice of you to call the dealership. Let them arrange the pick up/drop off.

[shark]

I did an early lease termination on my leased vehicle. As soon as it was inspected and handed over to the dealer, we filed chapter 7. My attorney said the lease balance will be discharged with the case.

[Hopefull1983]

I surrendered my vehicle a few weeks ago. I called CitiFinancial and told them I needed to surrender because I was in a financial bind and was way in over my head. They tried working a payment plan with me, but it was still too expensive. CitiFinaical was very nice and sent a repo guy out a few weeks later to pick the vehicle up. I havn't heard form them since, but I'm sure I will!