I can't believe this. I just called Bank 1 to find out why they have not sent me a statement since I "reaffirmed" my car lease. BK was discharged in 2/03 (ch 7). I have been making my payments faithfully and assumed they were reporting to the credit bureau (which she told me they are not). I was told by their bankruptcy department that they do not reaffirm leases in a bankruptcy. She said there is an "informal agreement" between me and Bank 1 that they will allow me to keep my car as long as I make my payments on time. She also told me that they can not charge me any late fees or over mileage fees!!! When I am ready to give up the vehicle, I call them and they will come pick it up, no questions asked. She told me not to purchase the vehicle because it will not be worth the residual and I will have a hard time getting financed for a used car at the amount that I would owe after 5 year lease is finished. I can't believe this. This is good news to me because I'm already over the mileage limit and have (had) a year to go before the lease is up. I know this is a negative because it is another "bad debt" on my credit reports and I have never been late on my payment in 4 years. Has any one else heard of this???
This is the same thing that happen to me...although I chose not to reaffirm...I kept the car and continued to make the payments...my lease is now over and I intend to turn the car in this weekend...I was told by the BK department that once they receive the last payment and the car has been returned...they will in turn change my credit report to reflect that the balance was "paid as agreed"...right now it is saying it has a zero balance and was included in the BK. I am hoping once this is changed, it will be reflected in my scores...I just got a used car loan for 12.5% which I plan to refinance in 6 months to a year.
Who is your lease through? Is this a goodwill gesture on their part to put a positive on your credit report? I would like to ask Bank 1 to do the same.
My lease is through IFS...Infinity...I dont think it is a goodwill gesture at all...It was never included in my BK, although it was on the papers...I didnt list them as someone I could not pay...I just think this is the way it works...I never broke my contract with them...I continued to pay throughout my entire lease agreement...I never had a late payment with them...it is only right for them to list as paid as agreed.
How is it currently reported on your CR's? The BK dept. said they are reporting this lease as "included in bankruptcy." I guess this is Bank 1 policy. Infinity has a better policy if they did not put a negative rating on your CR. Maybe i should try to work a deal with the BK dept.?
Right now it is listed as "included in BK" with a zero balance...but they told me that once the last payment is received and the car is returned that they will list it as "paid as agreed." I remember calling them soon after I filed and wanted to know why it was listed like that when I still have the car and I was still making payments...they said this is their policy and as soon as the lease agreement was completed as per the original lease...then the reporting would change to "paid as agreed."
Do you have a written guarantee they will change the negative rating to a positive one? My concern would be that they would tell you this only to have you complete the lease term and then screw you over once you have finished. If you do have a written guarantee, can you please tell me what it says so I have an idea of what offer to present to Bank 1? Also, did they tell you that late fees and mileage fees are obsolete now?
No, I do not have a written guarantee...I didnt have any choice but to keep the car and make the payments...a repo'd car looks worse on a CR...I can only go by what they told me on the phone...once I have satisfied my lease agreement, they would report as so...which makes sense because it was not officially included in my BK.
Makes sense. There is absolutely no good reason why one would ever want to reaffirm a car lease. I imagine most courts wouldnt approve it anyway, since its always a one sided deal (for the lender)..that proably why they don't even bother trying.
Your information has been very helpful. I'll see what Bank 1 thinks and ask why their policy differs from that of others and maybe try to get them to report my rating as a positive if I agree to continue making timely payments for the next year. What really gets me is that in 4 years, I have NEVER been late and now they are really sticking it to me. Thanks for letting me bug you.
I'd be curious to know what your lease says--verbatim--about BK and continued lease payments. Of the two leases I've been in, both have said that if I filed BK that I would be in breach of the lease. It sounds to me like estoppel would apply if they allow you to keep the car and pay on the lease after a breach (by filing BK). But I guess as long as the payments are current then there's no harm either way.
