A Car Lease Let it Go or Not? Please advise.

[MzPriscy]

Hi all. I am new to the forum and would really like your advise.

I am in the process of filing for BK Ch. 7. I hired an attorney and am awaiting the call to go sign the documents. Here is the thing. I have two leased vehicles. One solely mine and one which I cosigned for my husband. I originally was thinking to reaffirm both vehicles. I definitely will reaffirm his since he is not filing for bankruptcy.

But, my lease is $586 a month and his is $519. We both work for the same company although no one knows we are married. So we could car pool.

Should I let my car go?
I have never not had my own vehicle so it scares (since I learned how to drive that is!)

Any advise would be helpful.

Thanks! P.C.

[SMinGA]

I doubt you will be allowed to re-affirm both leases. You can only reaffirm if it will not create a financial burden by keeping the debt. Reaffirming over $1,100 in vehicle payments sounds like a financial burden, if you ask me.

I'm not sure why you feel the need to reaffirm your husband's vehicle? I gather you are filing as an individual, and if so then your BK will not relieve his obligation to pay. So he'll keep going as usual. But if something goes wrong, you're not responsible for the payment.

Would it be possible to find a lower car payment?

[goingcrzy]

We are down to one car right now and it works fine. There have been a couple of times where we needed two cars. It's very easy to rent a car for the day. The enterprise by me will actually drop the car off at my home.

I would suggest figuring out how many times in a month that you may need two cars and see which option is cheaper.

I would also keep the car with the longer lease. Some have had difficulty in getting a car loan right after BK

Lastly, don't tell the trustee at the 341 you are turning the car in. He will view it as $$$ to pay a chap 13 plan. Let the car go after discharge.

Good luck!

[goingcrzy]

SM has a good point. I wouldn't reaffirm anything (assume is the correct term for a lease) and do a ride through.

It's tough to give up the car "for appearance sake". I had a Porsche and a Landrover and was so worried people would find out about my BK if I got rid of it. I let the porsche go and I am aggressively trying to get some money together to get rid of the Landrover too. At some point you will come to the realization about how much you can save (it's nice to have a savings account again) by getting a cheaper car.

Make sure you run everything by your lawyer first. You don't want to buy a cheaper car before you file if it will give you excess income to put you into a Chap 13. Understand the means test well.

[MzPriscy]

Thank you for your advise. It is truly appreciated. Yes, his vehicle has the long lease so I was thinking I would have time to repair my credit. The Lawyer asked if I wanted to turn in or reaffirm the vehicles but did not warn me about the possibility of Ch. 13. I have no assets. The only thing is a pending personal injury suit he is aware of.

[MzPriscy]

To replace my husband's lease? I do not think leases are negotiable as far as I know.
I do not want to ruin his credit as he is just building it. No need for both of us to drown. We have not been married long.

[SMinGA]

I was referring to your lease, as the vehicle to replace.

If your spouse is not filing - he'll need to keep his. But it may come down to having to let yours go in the bankruptcy, since the payment is so high. Giving up the $586 payment does not automatically mean you'll be in a ch. 13. It all depends on what income, expenses you have.

Discussing this with your attorney is a good idea, before you take any action.

[MzPriscy]

I was referring to your lease, as the vehicle to replace.

If your spouse is not filing - he'll need to keep his. But it may come down to having to let yours go in the bankruptcy, since the payment is so high. Giving up the $586 payment does not automatically mean you'll be in a ch. 13. It all depends on what income, expenses you have.

Discussing this with your attorney is a good idea, before you take any action.

Thank you, SMinGA

[MzPriscy]

SM has a good point. I wouldn't reaffirm anything (assume is the correct term for a lease) and do a ride through.

It's tough to give up the car "for appearance sake". I had a Porsche and a Landrover and was so worried people would find out about my BK if I got rid of it. I let the porsche go and I am aggressively trying to get some money together to get rid of the Landrover too. At some point you will come to the realization about how much you can save (it's nice to have a savings account again) by getting a cheaper car.

Make sure you run everything by your lawyer first. You don't want to buy a cheaper car before you file if it will give you excess income to put you into a Chap 13. Understand the means test well.

Quick question.... on "a ride through" do I keep paying for the lease up until the discharge?

[SMinGA]

A ride thru means you plan to keep the vehicle, keep paying, but not reaffirm (loan) or assume (lease). Meaning your obligation to pay the debt gets discharged - but the lienholder's security interest in the vehicle remains. With many lenders, as long as you keep paying they won't go after the vehicle.

Its a way to keep a vehicle, but not saddle yourself with a big debt in case you decide to give it back later.

[StartingOver08]

In a ride through, you keep making the payments as long as you want to keep the vehicle. You do NOT sign a reaffirmation agreement. You have to keep the vehicle current.

IMO, I would surrender your vehicle and not reaffirm your husbands vehicle. He can make the payment on his and you can get your fresh start with a much more affordable vehicle after BK. (But IMO vehicle payments keep us broke)

[MzPriscy]

[StartingOver08]

You should have said FORD Credit at the beginning! Ford has a reputation for repo's if you don't sign the reaffirmation agreement.

Get away from Ford. Surrender the vehicle.

[MzPriscy]

You should have said FORD Credit at the beginning! Ford has a reputation for repo's if you don't sign the reaffirmation agreement.

Get away from Ford. Surrender the vehicle.

StartingOver08,

When would I surrender after it is dismissed? I am trying to do right...ugh!

[StartingOver08]

You do not want a Bk dismissed.

You want a BK to be discharged. There is a big difference

You can make arrangements for your surrender after the discharge directly with the Bk dept of Ford.

What I did was not sign the reaffirmation agreement (I had two vehicles, reaffirmed one and surrendered the other). I changed my statement of intentions from reaffirm to surrender just about a week or so before my discharge. Then called and made arrangements for pickup of the car. Personally I had them pick up the car from the place where I bought my replacement vehicle as I did not want the repo man coming to the house.