my leased car after discharge

[Kiltie]

Hi all,
I had a chapter 7 discharge back in Dec 31 2008 and I never signed an affirmation form for my car. I realized that Honda is no longer reporting my payments to any credit bureau. As long as Im making monthly payments they will not touch the car.
I was thinking at one time to buy a used car and turn in the leased car and walk away from it. A dealer salesman that I was dealing with told me that if I turned in my lease and walked away that it would be handled as a voluntary repo. Would a voluntary repo look that much worse on my credit report? Would another discrepancy really be that bad? And if I were to finance another car (used) that the amt remaining on my lease would be added to the dollar amt I would be financing.

This was an area that I had never thought of. He told me to just continue paying on my lease for the remaining 12 months that I have and turn the car in then.

Do I continue with my current lease until the contract is finished, Or do I go with a voluntary repo and get something that will help to establish credit? Any suggestions would be greatly appreciated!!!

[AngelinaCatHub]

I doubt you would have to assume the lease into a new loan on a used car, unless you were sold into it by the same place you turn it in. Your credit is what it is and I doubt that buying a used car would help you that much since, if you can get a loan for a car now, how much has it hurt you at all? What would be the advantage to changing cars? Only to improve your credit? I can't see it. 'Hub

[Kiltie]

Ive tried about 4 or 5 times to get into a new used car but was turned down each time. I figured since I at least have a car for another 12 months that I would look into it now instead of waiting til the last minute, but IM not having much success.
The last salesman that I spoke with was the one that told me the lease car I have was holding me back since I had to roll over the remaining balance into a new loan with the new used car.
I assumed that because my lease was written off thru honda that I wasnt responsible for the balance. After all if they're taking my money the least they could do is report it to the credit bureau. But the salesman said it was better just having a BK on my credit report than a BK and a repo.
Maybe I should just keep paying on my lease and continue to look again in another 8 months or closer to my lease ending date. It just seems a waste of money paying $3000 for the remainder of my lease and receiving no credit for it.

[gamecockfan]

I'll be doing a ride through with my lease also. From everything I have read and what my attorney has said, as long as you do not assume the lease during the BK process you can just walk away from that least at anytime now with no penalty. You have no obligation to keep paying on that car.

It sounds like that salesman just doesn't understand your situation. I actually wouldn't even mention your current lease when you go car shopping. It shouldn't really matter and the balance you owe can't be added to the new loan because you don't really owe anything if you didn't assume the lease.

Have you pulled your credit since the BK to see how that car lease is now listed? Maybe it is still listed as a current lease that you owe and that could be the problem if the new lender thinks you do already have an obligation. I haven't filed yet but it looks like most people end up with some errors on their credit reports after BK.

If you are trying to get a car loan to improve your credit I wouldn't do it. I'd just keep paying the lease for the next year and get some age since your BK. Car loans don't do a whole lot for your credit score and with some age you will probably get a better rate. If you are doing it to get rid of a high payment then I understand that.

I have an 08 with a pretty low payment and about 15 months left on the lease so I'm planning on paying it until about a month before the lease expires and then buying something at that time. I won't get any "credit" for it but at least I'll have a nice, reliable car to drive with a payment I can afford.

[uofaguy]

I've been doing a ridethrough with my car lease and my attorney said the same thing that gamecockfan's said (i.e. I should be able to walk away at anytime w/out an issue or any financial impact). I believe the only thing that should be reported on your credit is IIB (nothing about a voluntary repo if it was discharged and you did not reaffirm).

My lease is up in a few months and I plan to call the finance company to arrange surrending the car next month so I don't have to listen to the dealer attempt to collect wear and tear, lease termination and any other fees they can think of from me if I waited until the end. Good luck & if anyone has heard differently or has a conflicting experience with a discharged autolease that was not re-affirmed, please let me know.

[Kiltie]

no I did not reaffirm my lease. However on my Credit Report American Honda is showing Derogatory for the condition under all 3 of the reporting agencies. Trans Union is showing a balance and TU & Experian is showing pay status as current. My bankruptcy was discharged on Dec 31, 2008 but my payment history for Trans Union is showing ok or current from May 2008 til April 2009. American Honda told me on the phone that they will no longer send monthly bills and have not since Aug or 2008.But somehow its still showing me as current on TU and Exp. When I look online at Owners link which is a site for Honda owners using Honda Finanacial Services. On their home page under My Finance, it shows my lease and acct number with my last payment received. Also it shows payment due, amt due and last updated.
All this is current except statements since they stopped last Aug 2008.
This pretty much leads me to believe that my lease is still current and being reported. If this were discharged than I would think that all this correpondence pertaining to my lease would not be updated online. Dont understand how hard it would be to send me a bill each month.