If you have a car that you’re leasing and are planning to go through a Chapter 13 bankruptcy, you may be wondering what will happen to the least. Generally, there will be two options open to you. The first would be to return the vehicle. The second would be to continue making your payments.
Before you decide which of these is right for you, think about the positives and negatives of the decision you’re going to make. For example, one positive of Chapter 13 bankruptcy is that it gives you the opportunity to pay back what you owe over time. At the same time, it allows you the opportunity to walk away from some debts, like car leases, if you don’t want to continue on with them.
It’s not very common to have a lease assumed by a Chapter 13 bankruptcy, so you should decide whether you want to continue on with the lease or to reject it. Depending on if you’re current on the payments, you may have further options for repayment.
If you cannot continue to pay for your lease on top of the Chapter 13 bankruptcy payments, then you can choose to reject your lease. If you decide to do this, then any missed payments will be added to your repayment plan (this includes fees and over mileage fines, damage or other related expenses). Your vehicle will be repossessed (or returned) shortly after your bankruptcy is approved if you choose this option.
Your attorney can talk to you about your options and if keeping a leased vehicle is a good choice in your circumstances. Every bankruptcy is different, so it’s worth discussing your options.