Question on lease-end balance statement & credit...?

[Anonymous]

Three years ago I co-signed on lease for someone that became my Ex during that time.  She made all of the payments with no problems; I watched the account like a hawk of course as I didn't want to see a late payment on my CR.  The loan was paid off about 2 months ago and reported closed on 2/1/18.  Today I received in the mail a lease-end balance statement stating that due to excess mile overage a large fee needs to be paid.  I called Honda and they said my address is the one on file, so I received the bill.  This means that she had not received the bill.  I asked if they could mail one to her and they said no, not unless she calls and requests it.  Basically, I have to send this bill to my Ex and just "hope" that she does the right thing and pays it.

Assuming the worst, that she doesn't pay it, what will happen and on what time line?  Naturally since the loan account is closed, this bill can't impact that trade line.  I would imagine that Honda at some point would send it to collections and at that point a negative mark would show up on my CR.  For those with experience on this subject, typically how long from the date the bill is due (25 days from now) would this take to happen?  Would they reach out a few more time first?  Could I call them and extend it?  If my Ex is going to indeed pay it but drags her feet for a bit, I just want to know my chances of getting screwed here.  

Any advice on this subject, especially from those that have dealt with something similar would be excellent. 

[DeeBee78]

I think what you have here is more of a relationship issue than a credit issue, but that's a whole 'nother story   

What I would do to preserve my credit rating is pay the charge before it goes late or to collections, then collect payment from my ex. If your ex drags her feet on paying you back, take her to small claims court to get a judgement against her (or maybe even one of those daytime court shows )

How excessive was the mileage and what's the amount we're talking about here? Any reason she didn't want to buy the car when the lease was over? People are usually desperate to buy a three year old Honda at lease residual prices, and the dealer has probably marked it up $5K over that by now. 

[Anonymous]

I'm not sure how excessive the mileage was, why she didn't buy it out, etc.  Our contact is extremely limited.  The bill is for $3300.  If it was for a few hundred bucks I'd just eat it, but I don't want to take that kind of chunk out of my savings.  I know if I pay it, I'll never see it back.  We live in different states and I don't realistically see a small claims court thing happening.  My best bet here is to see if she'll pay it on her own.  She made good on all of the lease payments for 3 years, so she may very well pay this as well if she has the money.  The problem is if she doesn't, then I'm sort of screwed.

[DeeBee78]

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@Anonymouswrote:

I'm not sure how excessive the mileage was, why she didn't buy it out, etc.  Our contact is extremely limited.  The bill is for $3300.  If it was for a few hundred bucks I'd just eat it, but I don't want to take that kind of chunk out of my savings.  I know if I pay it, I'll never see it back.  We live in different states and I don't realistically see a small claims court thing happening.  My best bet here is to see if she'll pay it on her own.  She made good on all of the lease payments for 3 years, so she may very well pay this as well if she has the money.  The problem is if she doesn't, then I'm sort of screwed.

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What on earth!? At .15 a mile (the standard excessive mileage rate for Honda's), that's 22,000 miles. Did she think it was a rental with unlimited mileage, lol!?.  Let's hope she has the money to pay it. 

 It's definitely worth considering a claim if she doesn't intend to pay it. Small claims court is great because if you pay the ~$50 to serve her in her state and she doesn't respond to the complaint - boom. Default judgement in your favor. You then have access to wage garnishments, property leins, and even a bank levy if she's hiding money in savings and you know her bank account information. Just keep it in your back pocket as a potential option. 

[Anonymous]

It wouldn't surprise me if her mileage went over that much.  For the last year of the lease she was commuting easily 150 miles round trip for work.  If I really cared to know I know Honda would disclose that info to me, as both of our names are on the account.  I'm just hoping she pays it.  I don't really know how to tell if/when she does, though, other than calling Honda every few days and inquiring.  I would just like to know if there's a way to tell if Honda is going to escalate things to the next level, as I'd certainly want to intervene before then. 

I've worked hard over the last 2 years to get my credit scores to a good place and actually may see 850 scores in 6 weeks... no way I want to give that up!

[Kree]

They can, and do, report late payments on closed accounts for lease residuals.

I had to deal with that for a few months with Nissan.

[Anonymous]

Really?  Do the late payments show up in the months following the closure of the loan?

[Kree]

Yes. My lease closed in November. I had a late reported in Dec on all three bureaus and in Jan on EQ.  It was over 27 cents that were misrecorded in paperwork from the dealership to the financers.  Got it straightened out, but it was very annoying.

[Anonymous]

I can imagine.  Good information.  So a lease-end balance essentially can be viewed as another monthly payment.  That being said, I suppose you'd have to go 30 days past the due date on the bill before it would ge reported late?

DeeBee78, I sent you a PM if you could check it out when you have time.  Thanks.

[Kree]

Yeah, I think 30 days. Can't remember if they calculated it based upon the leases payment dates, or if they calculated it from the turn in date. I assume those two would normally be close together.