Optionally, the lease could be included in the bankruptcy. This will relieve you of the obligation to maintain a positive balance of payments; however, you will forfeit the equity you have accumulated through prior payments. Consider how near you are to the conclusion of your lease.
If you include your leased vehicle in your bankruptcy, they will repossess it, leaving you without a means of transportation. Consider what you will do for transportation if you surrender your vehicle in the bankruptcy.
Including the lease in the bankruptcy will likely exempt you from any fees and penalties associated with breaching the lease, as these will be discharged following the filing.
Then there is the leasing assumption. Here, the individual declaring bankruptcy has the option of keeping the lease distinct from the bankruptcy and continuing to pay according to the original agreement. In some states, lease assumption may require documentation. These documents must be correctly completed and filed with the bankruptcy. If you choose this option, you must retain legal counsel.
Once you have agreed to assume a tenancy, you should remain current on payments and adhere to all terms. If not, the bank may repossess the vehicle with minimal or no notice.
The last option is known as a ride-through. This will enable you to continue honoring the lease agreement to the best of your ability. This operates similarly to the assumption of a lease, but no documentation is filed during the bankruptcy.
If you fall behind on payments, the lessor has the right to repossess the vehicle, leaving you without transportation.
In addition, you may not receive a monthly payment statement because the bank will avoid anything that could be misinterpreted as an attempt to collect a debt. Obtain the address and mark the payment's due date on your calendar so that you do not inadvertently neglect the payment.
You are in the greatest position to decide what happens to your car after you file for bankruptcy. Remember to act in advance and make the best decision possible given the circumstances. Regarding your state's bankruptcy laws, it is always advisable to counsel with an attorney.
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