End of Car Lease w/o Reaffirmation Agreement

[frankthetank]

Hello, we had our Chapter 7 discharge back in November of 2019. We had a leased vehicle and did not sign a reaffirmation agreement at our attorney's advice, however, we were able to keep the vehicle through Honda if we kept making our monthly payments, which we did. Our lease is coming to an end in one month and my question is if we will be liable to pay any damage fees, turn in fees, etc. or is that not permitted by Honda since we did not reaffirm? Our bumper has some minor damage and we don't plan on purchasing a Honda again so they will charge a $350 "turn in" fee I am sure. Thanks!

[justbroke]

Welcome to BKForum frankthetank

This is an interesting situation and from what I gather, the caselaw is mixed. The question is whether you assumed the lease on Schedule G (Executory Contracts and Unexpired Leases). From my quick reading, an assumed lease does not necessarily need to also be reaffirmed in order for the contract to be valid and enforceable. That's the question that you need answered. I can't answer that question as it has significant legal impact.

First, did you assume the lease? If so, you'll need an attorney to tell you whether or not that assumption, of the lease, excepted (excluded) that lease from being discharged in the bankruptcy.

I would go back to your attorney since your attorney did this. Ask them whether the assumption basically tied them back to the contract terms. I just bread a case, Bobka vs. Toyota Financial, which is a California case. (That means it may not even apply in Pennsylvania.) However, the Bobka case court found that the assumption was enough to render the lease enforceable and that it survived the bankruptcy discharge despite no reaffirmation.

It's a murky area of the law. I don't know what they do in the 3rd District Court of Appeals or Pennsylvania as this area doesn't have much caselaw. The caselaw that is there is on both sides of the fence.

See: https://www.casemine.com/judgement/u...2cca1de230ef37
See Florida Attorney ABI article on this subject: http://abi-org-corp.s3.amazonaws.com...on.2-27-15.doc