Chapter 7 and Leased Vehicle Impact?

[mark1210]

What is the name of your state? TX

Due to circumstances beyond my control I may be forced into chapter 7. My concern is that my only vehicle is a leased vehicle. Could I end up losing this vehicle if I file for chapter 7? My friend believes it to be ideal to out and get a car now that is a regular purchase rather than a lease since my credit is still good as of right now and then file chapter 7 to avoid losing my leased vehicle. Is this ideal or even legal? Essentially, the bank would repo the lease and the car I "own" would remain.

 

[Ladynred]

If you can keep up the payments on the lease, then you can reaffirm on it and keep the car, even in Ch 7 bankruptcy. If you give it up, it WILL show as a repo on your reports -- you don't want that.

 

[mark1210]

Never thought of that, thank you. Is reaffirming something that would be subject to bank's or trustee's approval? If so and they do not approve would the method my friend mentioned work? Obviously the repo part would look very bad but I have to have transportation.

 

[Ladynred]

The bank would be very happy to have you reaffirm, so you shouldn't have much trouble there. The court does have to approve it, but its usually not a big problem for things like cars and homes.

It is not unusual for people to buy newer more reliable vehicles before they file BK because doing so afterwards is ugly - the interest rates are horrendous. I'd avoid the voluntary repo, there has to be another way.