I filed Ch 7, discharged 10/30/02. I had a leased vehicle that was not reaffirmed. Is the lease agreement void? If I go over my mileage will I have to pay for it? If I turn in the vehicle today will I be penalized? Also, I pay my bills online and the Sept. payment for this vehicle was not received. I received a call from the creditor regarding this and we are trying to find out what happened. I asked if it had gone on my credit report and it has. How bad is it to have a late pay on your credit report after BK?
Do you mean Oct of 2003? And if you are showing any lates on your credit report AFTER filing a Bk, it is usually the kiss of the death. When you filed your Bk, whoever holds the lease automatically denied accepting the payment since when you file and it is the law, creditors may no longer "send a statement" or "ask" for payment. If you carry a mortgage, the same thing may happen, it happened to us with our mortgage, Countrywide, and of course, like you, we were not informed about this, so it made our payment late until I screamed, danced, and it was reversed. You can call and ask to receive a statement by mail, since they will most likely stop sending you anything unless you call and ask...........sorry, I don't have my glasses on either......
Reaffirming means that you will continue to make payments and as long as you make payment you can retain use of the vehicle. Same is true of a CC account, except you don't get to continue the use of the CC, etc. A bk7 stays on your credit record 10 years and all bk's are public record for 20 years unless you are lucky enough to get it deleted in disputes which does happen. Bk's 7's do not require repayment of the debt, however again, you can reaffirm a debt, we did this with one CC as we were promised a re-issue when it was paid off and it only had a balance of $400 when we filed, but a very important company to us and they had been exceptional in service and actually treated us with diginity, not harrassment, thus the reaffirmation. However, paying the debts back does not make your credit any better so consider that if you are thinking of filing a BK13. I feel enough damage is done, and is another 3 years on the credit report worth paying for a major dollar debt? We could never have paid our debt back in th time alloted with a Bk13, and of course, no longer had the income anyway. DH is employed now at less than half of the $150,000 he made before. FYI, our debt was due to job loss via corporate buyout, unemployment of over 18 months, and not a decision we made lightly.
I gave the short version in my original post; here is the full version. I am so long winded I really wish I could talk to yâ??all on conference call so I could give the minimum info and then answer any questions instead of trying to guess what info yâ??all will need. We were discharged 10/30/02 - last year. This is how our lawyer explained it to us: BK voids all the contracts you have with creditors. Anything you want to keep you pay for. You can either create a new contract through reaffirmation or you can continue to make your payments with no contract. When you do not reaffirm you are basically at the mercy of the creditor. At any time they can decide to not take your next payment and take back the asset. Now, on cars specifically, they depreciate. It is not in the interest of the creditor to take the vehicle if you are paying for it because then they have to sell it and find someone else to make the payments. As long as I am willing to make those payments every month they allow me to keep the car for an additional 30 days. But by no longer having a legally binding contract the creditor can end the agreement or I can. At any time. Is this true? Can I just decide I am not paying for this anymore (1 year post discharge) and turn it in with no liability? There are 2 years left on the lease. I am not planning to turn it in tomorrow; I am planning on finishing the lease on the date of the original contract. I am over my miles per the lease agreement (which I believe to be void). I will be changing jobs and driving considerably less over the next 2 years. I might not be over my miles by the time I turn in the car but I want to know where I stand. Can they charge me for the additional miles? Since I did not reaffirm can they report to the credit bureaus? I think â??yesâ? because there is an implied contract. I think â??noâ? because I do not owe them anything more than my last payment. So do I have a due date to be late on? Yes, I pay according to the previous contract due date and thatâ??s the date they expect it. They only started reporting in June of this year even though I was discharged with no reaffirmation in Oct. of last year. I was told this by the CS rep.; I have not pulled my report since May of this year. I was using the suggestions posted here for clearing up our credit reports and have reached the point that only the stubborn creditors are left. I took a break from repairing our reports to gear up for the fight ahead. Thatâ??s what I get for getting lazy. Well, tired really. Some creditors really do make you feel that reporting incorrect information is aimed personally at you. I still have some reporting us being late during the BK (oh, so you tried to collect a debt when you were legally barred from doing so?) and owing money.
When we did our chp 7 in 1991 the judge denied our reaffirmation agreement. Ours was not a lease but a finance and the way he explained it was this: Reaffirming it would make us liable for the balance if we fell behind on the payments and they could repo the car and make us liable for the balance once it went to auction, etc.... Not reaffirming it meant we could fall behind on payments and they could take the car BUT they couldn't hold us responsible for the balance after auction,etc.... Not allowing reaffirmation he stated was in our best interests as debtors. He didn't want to make us liable for the balances if for some unforseen reason we couldn't make the payments. Of course we paid it off in good faith and were allowed to keep the car. I don't know how leasing works but if it's not reaffirmed then there is no contract one would assume. Therefore if the car is NOT reaffirmed the contract is nul and void and you can voluntarilly return it and not be liable for the difference in it. Oh and the bank did continue to report to the CRA's til it was paid in full as if we reaffirmed it. It was like the loan just continued. And another good point! DO NOT make any late payments AFTER the discharge as obtaining a home, etc...is much much easier if you have perfect credit from date of discharge on (our home was bought in 96 (4 yrs post discharge) and the lender specifically looked for perfect payment history from date of discharge on only)...therefore I would pay out the lease and return it when it is up and not volutarilly give it back. It may mess up your credit even though it wasn't reaffirmed.
Thank you! That was what I thought regarding the lease contract being void. I just wanted someone with some knowledge to confirm or contradict what I thought. The creditor has been nice about the late pay. I pay through an online 3rd party service. I am checking with them to see if the check was cashed. If it was the creditor will remove the 30 day lat from my credit reports. If it was not cashed they *might* remove it after receipt of a letter from the online bill pay service. We'll see.
Check the back (or the fine print) of your lease. Many leases say that if you file BK, the lease is terminated. Since your discharge occured a year ago, and the lessor has not demanded possession of the car, they may allow you to continue to make the payments. But beware: you may be approaching a time when the biggest portion of depreciation has already come and gone. In other words, the car's market value may be closer to the amount owed. At that point, it's worth repossessing. Still, after a year-and-a-half, I'm curious why the lessor hasn't either asked for the car back or asked for reaffirmation. Oh well, if they do neither, I guess it's fair to assume that you still have a lease.
