Auto Lease: lease-end options during BK13

[TheBKLounge]

Assuming all payments have been on time (0x30), do original lenders typically extend credit to finance the lease buyout. I have a lease with Mazda (MMCA) that is due later this summer. I am at my mileage allowance already, but would consider keeping the car if I know that I can get financed for the buyout.

Been making BK payments since 11/2009 and had 341 meeting 2/2010.

Anyone been in a similar situation? If I don't get to keep the car with Mazda, I will have a pretty hefty mileage penalty...what would become of that (there is no way I could pay it outright)? If I do keep it, then it is a non-issue.

[SMinGA]

If you're in a ch. 13, its a non-issue I believe as that would be unsecured debt. I'm pretty sure your plan could be modified to include it - consult with your attorney to be sure.

[forgotten]

You really should have obtained a loan on a different car before you filed and just surrendered the lease.

In my opinion you still should still surrender the lease in your plan, that way you won't be responsible for the mileage and any damage (well, it will be considered general unsecured debt in your plan).

But no, it is not likely the lender(or anyone else) will finance the buyout. You will probably need to find a buy here pay here type of place to finance you on a different vehicle while in BK (with trustee/court approval, of course).

[TheBKLounge]

The advice was that most manufacturer's lending arms (in this case, Mazda) will generally work with debtors (assuming good history) as they don't really want the cars back. The F&I guy at my dealer said this as well. My credit was already trashed by my wife--unbeknownst to me--before I had the option to get a car prior to filing...and based on the above advice, it was decided to keep making payments on the lease.

[SMinGA]

Too little/too late I know, but you could have financed a reasonable used car at a high rate and then included that in your BK. The rate would have gone down to the till rate of your district.

Question to ask your attorney: If you buy a used vehicle NOW, can it be included in your plan at the till rate. I don't think this is possible, but no harm in asking. I think the idea is that if one creditor (even though its secured) is getting an absurd interest rate, that is taking money away from other creditors.

[UpsideDownMI]

They may be willing to lend to you if you have a strong co-signer.