Vehicle Lease paid by trustee through Plan - return damage/miles/disposition fee??

[debtinohio]

My vehicle is leased through Mercedes Finance. It was scheduled to end 12/10/10 and I have until 12/20/10 to return it.

In our plan we accepted the lease and the trustee is making the payment.

Our lease company said just drop off the car at any dealer and let them know where and who I gave the keys too. No inspection/etc. to schedule.

Now, it is at least 1000 miles over @.25 a mile it has some small dings on the hood and now (from this past weekend) a big ding (still from a car door) on the left pass. door. There is also a $599 disposition fee.

My attorney *never* replies to these inquiries so I figured I'd ask. Anyone else turn in a lease lease like this with over miles/minor ding damage? Am I responsible for this and if so will they just amend the claim and have the trustee pay it?

TIA.

[forgotten]

Since you assumed the lease you owe the over mileage, damage, and any other fees. Your attorney really should have advised you of this because you opted to assume the lease. If you had rejected the lease you would not have to pay anything.E

Edit: Where i'm not clear is how it is paid. I'm not sure if it would be considered a post petition debt and it would come out of pocket or if it would be added to your plan.

[debtinohio]

I wonder if anyone has actually been billed for such a thing? I've seen posts like this in the past but never an update after the car was turned in.

They are not following any part of the normal lease turn in, they did not call me to schedule any inspection or anything. They have not sent me 1 piece of mail since I filed. When I called them they simply said "just drop it off at ANY Mercedes dealer and hand the keys to a sales associate and then call us and tell us what dealer and who you gave the keys to".

I did understand the assumption of the lease even though my attorney did not explain a thing, but I find it hard to believe they'll even bother with seeking payment based on their current behavior. They just need to sell this car for $12000 to get the FULL MSRP back since I've already paid $24000 worth of payments towards a $35000 sticker price so considering it has a current KBB Certified Pre-owned retail value of $27,000 I think they'll make plenty of money even if they spend $1000 reconditioning it. But, we'll see...

[catleg]

I assume that when you say you accepted the lease, you don't mean that you reaffirmed it in the sense of giving it life outside of bankruptcy.

I believe that your situation will be equivalent to giving up your car as a repo in a bankruptcy. If there is any deficiency balance pursued by the lender, it will be done as a claim against the chapter 13 estate and so it's just between the trustee and the lender. Any costs will just result in less for the unsecured creditors.

Another interesting fact you mention is that the car theoretically has equity, which means the trustee should try and sell it to recover money for the unsecured creditors.

I think I would be in no big hurry to surrender that car; in order to get it back the lender is going to have to pursue a motion for relief from stay. You could then make the trustee aware that there is potentially equity to recover. That should probably let you keep the car for free for a little while.

[debtinohio]

It's listed in my plan as:

b) Debtor assumes the executory contract(s) and/or vehicle lease(s) listed below.

Creditor Property Description Monthly Payment To be Paid Directly by Trustee
DCFS USA LLC xxxx Mercedes XXXX - LEASE

Further, I have a special provision listed later:

The Debtors state that the lease of their xxxx Mercedes XXX is scheduled to expire on December 10, 2010 and after said expiration date, pursuant to mutual agreement between the Debtors and creditor the Automatic Stay of
11 U.S.C. 362 shall be terminated and the Debtors will return said vehicle to creditor.

So, I took the extra 10 days allowed per customer service when I called them and will return it before the 20th since they don't need to file to request the stay be lifted.

[sthris]

I ended up turning in a leased vehicle one year into my chapter 13. The lease company had to file a claim for the overage and it was rolled into my plan as unsecured. ymmv

[debtinohio]

I ended up turning in a leased vehicle one year into my chapter 13. The lease company had to file a claim for the overage and it was rolled into my plan as unsecured. ymmv

Did you return it at your original lease termination date?

GO BUCKS :-)

[sthris]

I actually turned it in a few weeks late, due to some miscommunication between myself and my attorney. I had it picked up and they figured out the overage charges later (this was with Chase finance). I'd check with your lawyer about what to do but I expect that because the lease is pre-petition you don't pay any contractual obligations out of pocket it should come out of the plan. I'm not sure how you handle that if you are presented with a bill when you turn in your vehicle though. The lease company probably has experience with this it might not hurt to also check with them.

Go Bucks! XD

[debtinohio]

Thanks sthris.

I'll call the leaseholder to ask about the fees/etc. If they think they are billing me at turn in I'll just use the key dropbox at the dealer!

[forgotten]

I'm actually returning my lease this week as the lease is up on Saturday. However, I rejected my lease when I filed in 06/2009. They simply had no desire to retrieve the vehicle or request I return it.
Considering the residual value is over $38k you would think they would have... but who am I to judge?

Edit: P.S. Just to avoid talking to anyone about it I am dropping it off after hours at the service department with a note. BMW Financial Service told me to return it to the dealer, so i'm putting it where they asked!

[catleg]

I'm just curious if the ch 13 trustee tried to make your plan payments "step up" by the amount of the lease payment when the lease ended.

[debtinohio]

I'm just curious if the ch 13 trustee tried to make your plan payments "step up" by the amount of the lease payment when the lease ended.

It steps down $460 so I can use that amount towards a new car but technically it steps up by $140 since my lease payment was $600.

[sthris]

I'm just curious if the ch 13 trustee tried to make your plan payments "step up" by the amount of the lease payment when the lease ended.

Well, in my case our lease (and car loan) were re-affirmed and payed inside the plan by the trustee, so there was no step up. But considering my trustee did have our plan payments step up as 401K loans were paid off I would expect they would have done the same for a lease payment I was making myself.

We did have to go get a car loan for another car after returning the lease so our plan payment ended up going down to make room for that new expense.