3 Payments Left On Lease

[bunny1013]

What is the name of your state? PA

My husband and I are filing Chapter 7, as soon as we have enough money to pay the fees our case will be filed, it hasn't been filed yet and we haven't made any payments yet. We haven't had the funds to do so but are working on it.

We have three payments left on our leased vehicle from GMAC. This whole time, 4 years, we never missed a payment until recently. We are over 30 days but not 60 right now. How does this work on a leased vehicle with the bankruptcy? Is it treated as a repo whether we turn it in now and walk away with an amount due that will be included in the Chapter 7 or is it a repo if we ignore and just let them take it? Which is the best way to handle something like this like a leased vehicle but you haven't filed quite yet?

I have heard that a repo is worse on your credit than a bankruptcy. Is this true? We really don't have the money to pay the lawyer plus the car payments, any advice is welcome, thanks so much.

bunny

[Ladynred]

I have heard that a repo is worse on your credit than a bankruptcy. Is this true?

No. Bankruptcy is the mother of all credit report baddies.

If you give up the car during the bankruptcy, it will not go down as a repo. Whether you give it back or they take it BEFORE you file, that WILL be a repo either way.

[bunny1013]

Thank you for replying so much, I have been so worried over this. So is it better for us to try and make the payments until we actually have filed, then let the bank take it? We owe $400 for March, not paid yet so it is 30 days, $400 for April and will owe $400 for May. We may not even have the money for the lawyer until May, but he says stop paying our debts, and pay for the bankruptcy $1800. I didn't know if leases were handled differently, but I hate to have a repo on our record and never get a loan again. Plus we had such good credit until now and only have a few payments left. Would you pay the car payments or the lawyer? Thanks.

[bigun]

I'd pay the lawyer. Makes no sense paying money for something you aren't going to keep post bk.
Your credit report should be the least of your worries right now. Get the bk filed and go to work fixing the problems that created the bk.

[bunny1013]

Thank you for taking the time to read my post and help. If a repo was on our record, would we EVER get a car loan again? Would the repo on our report affect ever getting our home refinanced someday, do people with bankruptcies ever get refinanced or credit again? Our lawyer told us that lots of Chapter 7 people can have 700 credit scores again, is that true? Thanks

[bigun]

You'll get solicted for all manner of subprime loans within weeks of filing.
Trick is, ignore that stuff and realize a bk is like any other event on your report. Over time, it becomes less important. {Not minimizing that a bk is a massive derog}. But, with clean credit 2 years after filing, you qualify for FHA loans at conventional rates. As time goes by, you qualify for more conventional products.
A good credit repair site is [url]www.crediboards.com[/url]
There is an automotive finance forum and the mods are F&I huys at dealerships that can answer a lot of questions.

[bunny1013]

After calling GMAC we terminated our lease early, cleaned up and turned in our vehicle yesterday. We are just over 30 days but not 60. It looks like an early termination doesn't show on your credit report negatively at all, but a repo of any kind does. We will get a small bill for the balance but we won't have 60 days or worse on our credit report piling up.