Legal Question in Bankruptcy in California
Filed Chapter 7 - Close to Finishing Lease Payments
Two years ago we filed Chapter 7 which included the finance company for our auto lease. We agreed to continue paying the lease and have been since the bankruptcy (on time). We are close to the end of the lease and have been looking at new cars, however the dealers will not consider our lease as a trade-in because it shows a -0- balance. Question - What happens to our car once we finish paying off the lease?
2 Answers from Attorneys
Re: Filed Chapter 7 - Close to Finishing Lease Payments
It depends on what your lease agreement says. Some car leases provide the option to purchase the car at the end of the lease -- for an additional payment of course. Some leases just provide that the car must be returned. Some have penalties if you've put on more miles than were allowed.
So, take a look at the lease and see what it provides for. Then try calling the leasing company and see if you can reach an agreement. If not, then you might call an attorney.
Re: Filed Chapter 7 - Close to Finishing Lease Payments
When you lease someone else owns it. Just like an apartment there's a landlord. In this case the landlord is called a lessor. So you give the car back to the lessor. Any equity in the car belongs to the lessor.
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