Auto Lease Discharged in Ch. 7 BK Question????

[givens1026]

We filed for BK in Aug of 2008.  At the time we had an auto lease that was current at the time and scheduled to be up in Nov. 09.  We agreed to reaffirm the lease and agreed to this at the meeting of the creditors. 

Ever since we have made on time payments and have never fallen behind.  After pulling our credit last month we noticed that the loan was not reporting past Aug 2008.  It was showing current/pays as agreed.  I contacted the attorney who told me they didn't reaffirm.  I have contacted the leasor and they said this is correct and to just turn in to a local branch and we have no obligation to keep the car.

My question is. If we do this, will they come after us for a deficiency?  I do not want to pay another 3 months of payments just to borrow the car when we could finance another and have it reflecting on or credit. 

[Anonymous]

Hey There!

I filed Chapter 7 in May 2009.  Discharged Aug.  At the time I was still paying my Nissan lease.  I am in the same situation as you, I continued to pay the lease however past May of 2009 it is not showing up on my credit report.  I was told by NMAC that you can't reaffirm a lease, just pay it if you want to keep it until your turn in date or simply call them and turn it in.  Since it was discharged in the BK they can not come after you.  It is a discharged debt.  Of course they would love for you to keep it and pay the amount you signed for, but if you don't it will not affect you.  I am purchasing a slightly used vehicle in the next week( with a co-signer) to keep the interest rate in check, so that I can get back to rebuilding my credit..

Good luck to you!

[Anonymous]

If the debt was discharged and not re-affirmed (must sign a re-affirmation agreement), then there is nothing for them to come after  you for.  The account can be updated to Included in Bankruptcy.

If the account is showing PAID AS AGREED, then if you pay through the end of the lease, they may leave the trade line alone and let it continue to report paid as agreed with a zero balance.  This will be nice history now that you are rebuilding after a BK.

And when you think about it....you are always "just borrowing the car" when you consider most financing let's us drive till we trade it in.  Unless you pay your auto loans off and then drive for some time after....we are borrowing the car (after all we borrowed the money).

I would, personally, pay through the end of the lease, since you are getting the value of driving the car, and see if I could close this account out with a positive report and not end up with another derog account included in BK, especially if you want to finance another car.

Just think how auto lenders will look at this...you went BK, but paid as agreed your car....meaning you are a good risk on auto loans.  PLUS, you fully intended to re-affirm anyway and was surprised to learn it hadn't happened...so you are not doing anything you didn't originally expect to do.

Well just IMO 

Good luck.

Message Edited by txjohn on 12-11-2009 11:18 AM