topic Re: Car Lease After Discharge And Other Fun BK Questions in Bankruptcy

Car Lease After Discharge And Other Fun BK Questions

Anonymous — Tue, 17 Nov 2020 09:38:38 GMT

Hey everyone:

My husband and I filed BK back in May of this year and were discharged in September. It was a huge relief to be free of all that debt, and I am not gonna lie and say that I wasn't a lurker here during the whole process. Very helpful info and I decided to join and try and give back/learn what I can. So thank you guys and gals again

That being said, I have a few questions. We had leased a 2018 Toyota Camry back in November of 2017. It was the standard three year lease, and obviously when we agreed to it, we had no plans on filing BK. Fast forward to our filing, we didn't notice that the auto pay we were on for the car stopped, thus missing 3-4 payments while we went through all the BK stuff. Yeah, my bad. I should have paid more attention. Well I called Toyota and made a couple of payments to catch up, and they said call the dealer, they are the only ones that can help you with the lease.

After finally getting hold of someone at the dealer, and being pawned off to three different people (the first one left early, the second one had an emergency), we finally sat down and talked to someone. The lease was expired, and we were wanting to keep the car or even get a newer version. The guy we talked to ran our credit (it honestly felt like a car buying experience, which was odd since I guess I figured we'd just sign papers and be done) before saying he was going to inspect the car. He comes back and says since the car was part of the BK, he can't do anything for us. The best we could get was maybe calling Toyota and getting a few extra months on the lease. But he said the car needed to be returned. He gave us back the keys (which was surprising, I thought we'd have to uber home or something) and said to call the leasing guy in the morning to arrange a drop off.

So my questions are:

1. Is he right? Are we pretty much having to kiss the car goodbye? We can't afford to buy it outright, but we can continue to make the payments. We are behind two payments and the next payment is due in a couple of weeks. We also have to pay the registration which is around $460. Is there anything that can be done? We don't want to settle for some beater car from CarMax or something. We have another car that we finance through the credit union that we are square with and continue to make payments on. So we won't be screwed by having one car, but two woud be convenient.

2. Say we do return the car, are we responsible for any damage on it? It's in great shape, sans some small dings on the door from rocks or whatever. Are we responsible for the payments we missed? Are we responsible for registration?

3. How long would we have to wait to get another lease or a decent loan financed? 6 months? A year? 2 years? I'm not afraid to get a crappy interest rate (I can refi that eventually) but I would want a new car or a newer one than what we had.

4. How long would we have to wait to get new credit cards and rebuild? We had cards from Citi, Barclays, BBVA, Chase, Cap One, Discover, and a bunch of store cards when we filed. All were discharged.

Anyway that's all I wanted to know for now. If you need any info that would help answer my questions I will be happy to provide it. I hope everyone has a great day!

Re: Car Lease After Discharge And Other Fun BK Questions

DebtStinks — Tue, 17 Nov 2020 14:54:08 GMT

As long as you did NOT reaffirm the lease, I'd personally lean toward driving it until they come pick it up. Don't make any more payments. No, you won't be responsible for any damage, excess mileage, etc as long as it was included in your CH7 BK.

Getting into a new lease depends on numerous factors.

What are you current scores?

Anything positive and reaffirmed like a house or your other car with your credit union that has a decent length pay history?

Income? DTI? Possible down payment?

My wife and I did a lease with HMF about 10-11 months post discharge with our scores in the mid-high 6's, and a reaffirmed auto loan that had a 5.5 year perfect pay history. We qualified for the Tier 1 rate with HMF on the vehicle.

You can get new credit cards now if you like. Lenders like Cap1 are more forgiving than others like Chase & Citi which are pretty much no-go's until your BK is off your credit. Cap1 has a general rule of no new credit from them until it's been 12 months since your last charge off or included in BK action, whichever came first. Did your Cap1 account charge off before you filed BK? If so, 12 months from that date. Otherwise, 12 months from the BK. Cap1 has a prequalify tool online (soft pull) that won't harm or impact your credit just to look. I'd recommend going for the Platinum which has NO annual fee and you can request a product change to the Quicksilver (not QSilver One that has 39 AF) with NO annual fee after about 3-4 statements.

There are other issuers, but I'd start there first. If you have no credit cards reporting, you should see a nice bump in scores with your first credit card reporting.

Ask away with any questions you may have and if they're directed toward me, just tag me in the response.

Best of luck!

Re: Car Lease After Discharge And Other Fun BK Questions

Anonymous — Sun, 20 Dec 2020 04:22:03 GMT

@DebtStinks

Hey so it's over a month later. No calls from Toyota. Nobody asking about the car. Meanwhile we are wondering what to do. Are they just gonna take it sometime when we are out and about? The tank is almost empty, I'm half afraid to fill it up because I don't want a fully gassed up car taken haha. But I mean with the tags already expired, we are taking a chance when we drive it. What happens if we get pulled over? Will we have to pay a ticket for expired tags (if it's a fix it ticket) or do we just ignore it when they take back the car? When they do take it back, do we have to to sign forms or fill out anything? I don't want to be swindled into to paying for something we shouldn't have to pay for.

It's honestly more stressful than it should be. Although we are really surprised that we've yet to receive any kind of notification from anyone. No letters. No calls. No emails.

What to do?

Re: Car Lease After Discharge And Other Fun BK Questions

DebtStinks — Wed, 30 Dec 2020 01:59:59 GMT

With regards to expired tags, most states have a grace period, but if you get pulled over while driving, just explain it to the officer....or pay for a partial year registration. Keep in mind that without paying a monthly payment, you've been driving a car for free (except insurance and gas)

When it comes to them picking it up, yes it will likely be without notice. No, you won't need to sign anything and you won't be responsible for anything, regardless of miles, condition, how much gas is or isn't in the tank, etc.

Just relax since you filed. I would, however, begin to prepare for what you're going to do when they come get the vehicle....in the meantime, enjoy no car payment and save money.

Re: Car Lease After Discharge And Other Fun BK Questions

jkjklkjkl — Tue, 29 Dec 2020 23:02:36 GMT

If the car was included in your BK, they should not have accepted those payments.

You need to call Toyotas executive team and get to the bottom of this and see if you can come to an agreement to continue to make payments and do a buyout, since that's what you want to do.

If they disagree, the payments should be returned to you.

Driving the car without registration is illegal and you'll have to deal with those consequences, there are no "the car isn't mine" exceptions. You could receive a ticket to get the car registered or they could tow the car (very unlikely until it's well past expiration).

Getting to the bottom of this asap is your best bet since you'd prefer to keep the car.

Re: Car Lease After Discharge And Other Fun BK Questions

mich800 — Fri, 01 Jan 2021 00:44:32 GMT

@jkjklkjkl wrote:
If the car was included in your BK, they should not have accepted those payments.

You need to call Toyotas executive team and get to the bottom of this and see if you can come to an agreement to continue to make payments and do a buyout, since that's what you want to do.

If they disagree, the payments should be returned to you.

Driving the car without registration is illegal and you'll have to deal with those consequences, there are no "the car isn't mine" exceptions. You could receive a ticket to get the car registered or they could tow the car (very unlikely until it's well past expiration).

Getting to the bottom of this asap is your best bet since you'd prefer to keep the car.

Yes they can take the payments. Debtors do it all the time to keep the vehicle even if included in the BK. But you can walk away at anytime without it impacting your credit furthur.

Re: Car Lease After Discharge And Other Fun BK Questions

jkjklkjkl — Fri, 01 Jan 2021 00:57:06 GMT

Yes, when that agreement had been established but, it wasn't or else OP wouldn't be asking about what's going to happen with the car, which is why i said what I said.

And, this is a different situation because OP is at the end of the lease, as opposed to a traditional financing, which means that there needs to be an established/different plan of action.

Re: Car Lease After Discharge And Other Fun BK Questions

Anonymous — Sun, 10 Jan 2021 06:41:53 GMT

Well still nothing from Toyota. Honestly I am quite surprised. Don't they want their car back or are they out looking for it and I just never noticed because it's been in my garage 90% of the time? I mean I'm not thinking they forgot, it's still worth 20k+ so you know? But my husband says we should just call and say come get the car. Will they actually do that? I am afraid I'll go to the dealer and have to sit there while they inspect it and attempt to give me some sort of bill for past payments or damage to the car (they always find something) or whatnot. Can I just drive up and go to the desk and say I am turning in this lease, and leave? I mean I would have to sign something wouldn't I? Or at least get some type of receipt? The lease ended two months ago, so this is all just weird to me. At this point we really aren't interested in keeping the car. The lease was $500 a month and we are quite happy saving that now especially with everything going on in the world. That and our insurance will be cheaper. We are in no position to buy the car outright.

Another question, I got a pre-approval for some credit card in the mail with no annual fee. I forget the name, but I applied and of course I was denied. So much for pre-approval. I haven't tried anyone else. Is it time to hit up Capital One again or should I wait until March which will be six months after discharge?

Thank you all for the wonderful help.

Re: Car Lease After Discharge And Other Fun BK Questions

angelofmusic86 — Tue, 12 Jan 2021 16:11:25 GMT

@Anonymous wrote:
Well still nothing from Toyota. Honestly I am quite surprised. Don't they want their car back or are they out looking for it and I just never noticed because it's been in my garage 90% of the time? I mean I'm not thinking they forgot, it's still worth 20k+ so you know? But my husband says we should just call and say come get the car. Will they actually do that? I am afraid I'll go to the dealer and have to sit there while they inspect it and attempt to give me some sort of bill for past payments or damage to the car (they always find something) or whatnot. Can I just drive up and go to the desk and say I am turning in this lease, and leave? I mean I would have to sign something wouldn't I? Or at least get some type of receipt? The lease ended two months ago, so this is all just weird to me. At this point we really aren't interested in keeping the car. The lease was $500 a month and we are quite happy saving that now especially with everything going on in the world. That and our insurance will be cheaper. We are in no position to buy the car outright.

Another question, I got a pre-approval for some credit card in the mail with no annual fee. I forget the name, but I applied and of course I was denied. So much for pre-approval. I haven't tried anyone else. Is it time to hit up Capital One again or should I wait until March which will be six months after discharge?

Thank you all for the wonderful help.

I have no feedback on the Toyota situation, but I would try the pre-qual site for Cap1 - it doesn't hurt anything. I can't remember if you shared who you burned, but that would help some to see who you can try to pre-qual with.

Re: Car Lease After Discharge And Other Fun BK Questions

DebtStinks — Tue, 12 Jan 2021 18:56:22 GMT

Like I stated in a previous reply, unless you want to save on the monthly insurance expense, there's no need to call them. If you want to expedite the process, you can certainly call them and tell them to come pick it up, but there's still no guarantee they'll do it in a timely fashion. Big lenders like Toyota, etc are more worried about a lawsuit if they slip up during the BK process vs the few hundred or thousand extra dollars they lose by delaying the vehicle surrender.

Ultimatley, as long as you did NOT reaffirm (you'd know if you did) you're not on the hook for anything financially as long as you surrender the vehicle at their request...whenever that time may come.

Most auto creditors wait until discharge/closing of BK's before they come get the vehicle. I've read and heard of stories where the consumer keeps the car for months and months beyond that...I even heard of a case with Chase where the consumer kept their Subaru for 6 years (at the point of reading) and Chase hadn't done a thing.

Best of luck with your financial future and rebuild!

Re: Car Lease After Discharge And Other Fun BK Questions

Anonymous — Wed, 17 Feb 2021 13:37:12 GMT

I contacted Toyota again and basically asked if I can return it. They told me to bring it down when I can and they would assess damages and charge for a $150 disposition fee. Do I have to pay this fee? I'm half wondering if I should just pay the registration and keep driving the car, but there's no guarantee they won't just repossess it one day right? Or call me and say bring it back immediately?

Should I just go there and park it and give the keys to someone at the desk and be like "I'm done?"

Would there be any other steps to follow? I have never gotten rid of a car this way before. Usually I would just trade in my old cars.

Sorry for all the questions....

Re: Car Lease After Discharge And Other Fun BK Questions

DebtStinks — Wed, 17 Feb 2021 15:43:23 GMT

If the account was included and discharged in your BK, then you don't owe a dime. You're not required to complete any paperwork, etc. Simply drop it off if you don't want it any longer and all they can report is the account was included in and discharge via CH7 BK.

Now, if you want to keep the car, just keep making the payments as originally agreed upon when you purchased/leased the vehicle.

Best of luck!