Leased Car Ques.

[Carmen830]

I plan on filing Chap 7 in a couple of weeks, however I have a question. I am currently leasing a car which my attorney said would not be a problem to keep - however, is the car something that I have to re-affirm, or is that just for vehicles that are financed?

[Carmen830]

Anyone, please?

[WoodSprite]

Anyone, please?

I reaffirmed my leased car.

[Carmen830]

And the re-affirmation is done via the attorney when the full fee is paid and the papers are filed?

[WoodSprite]

And the re-affirmation is done via the attorney when the full fee is paid and the papers are filed?

From what I've read here, the exact timing varies considerably and matters not in the least, as long as the lease holder doesn't get excited and repossess the vehicle. I actually signed mine right at my 341 meeting, simply because my attorney was nice enough to save me the hour drive (one way) to his office. I don't know if there's an actual hard-and-fast deadline...anyone?

[HHM]

Actually, you don't really need to "reaffirm" a lease. Note, in BK, reaffirm is a term of art and references a specific type of transaction, i.e. assuming the obligations of a "loan" after discharge. With a lease, there is a form within the petition where you list all leases (executory contracts) and state whether you want to assume or reject the lease.

So long as you keep making the payments, no one is going to care. Generally, you will state that you reject the lease but keep making the payments...but that is something you should discuss with your lawyer. The reason you would state to reject the lease is to put the leasing company on notice that that you are not going to be obligated on the lease but you keep making the payments. If you still have financial problems after BK and default on the lease, you will not be liable for the lease deficiency. However, this tactic only works in some districts.

[Carmen830]

Good to know all of this -- thank you very much HHM & WoodSprite.