Chapter 13’s main advantage over Chapter 7 with a vehicle lease is that you get much more time to catch up if you’re behind on your payments. Vehicle Lease Assumption under Chapter 7 Our last blog post showed how to keep a leased vehicle by “assuming” the lease in a Chapter 7 case. This means you keep making the … Read More
If you want to keep your vehicle lease and are current you likely can under Chapter 7. You “assume” your lease contract and all of its terms. Our last three blog posts have been about rejecting a vehicle lease and giving the vehicle back to the lessor. You can do this either through Chapter 7 or 13. The result is the … Read More
Chapter 7 is the cleanest way to reject a vehicle lease and owe nothing. But if you have other reasons to be in Chapter 13, that works too. Ending a Vehicle Lease in Chapter 7 Our last blog post was about how a Chapter 7 “straight bankruptcy” can get you out of a vehicle lease. You can “reject” a … Read More
Chapter 7 gives you the option to either assume or reject your vehicle lease. If you reject it you’d owe nothing more. Here’s how that works. Getting out of a vehicle lease in a Chapter 7 case requires simply that you formally state that you “reject” it. Then you owe nothing more. Last week we showed how a vehicle … Read More
A vehicle lease is legally different from a vehicle loan in many ways. In the end it can be more expensive. Escape a lease with bankruptcy. The Temptation of a Vehicle Lease Leasing can seem like a sensible way to get a new vehicle. You often pay less money down and pay lower monthly payments. So leasing can sometimes … Read More
Chapter 13 can often give you the ability to reduce both your monthly payment and the total you pay on your vehicle loan. Here’s how it works. Cramdown in Chapter 13 Last week we introduced cramdown as an extremely helpful tool for reducing the cost of your vehicle loan. Cramdown can often: Reduce your monthly payments—sometimes significantly. Reduce the … Read More
Often your car or truck is fully protected in bankruptcy through an exemption. But if it’s worth too much bankruptcy can still protect it. How Chapter 7 and Chapter 13 affect your vehicle and vehicle loan can determine which of these options you choose. That’s why we’ve focused the last several blog posts on the differences between these options. … Read More
When you’re facing a vehicle repossession, a Chapter 7 case prevents that and gives you a few weeks of peace to get another vehicle. A week ago we went through a list of ways Chapter 7 buys you time with your vehicle lender. Included was that it “gains you some time to get another vehicle before surrendering your present … Read More
Chapter 7 prevents repossession for lapsed vehicle insurance, but only briefly. You still have to insure your vehicle again quickly. Our last blog post went through a list of ways Chapter 7 buys you time with your vehicle lender. Included in that list was that it gives you “a very limited time to reinstate required vehicle insurance.” This … Read More
Getting out of a vehicle lease by “rejecting” it in Chapter 13 isn’t quite as quick as in Chapter 7 but has about the same practical effect.
Vehicle leases are often not such a good deal. If you find out your isn’t, you can almost certainly “reject” that lease and pay no more.
Although Chapter 7 can work fine if you’re current on your lease, use Chapter 13 instead if you’re behind and need time to catch up.
If you are filing a Chapter 13 case for other reasons, it’s also a good opportunity to get rid of your vehicle lease if you want to do so.
A vehicle lease can cost you less up-front and each month, but is in reality very expensive. Bankruptcy is your way to break the contract.
Want to keep your leased vehicle but aren’t current on the payments? File a Chapter 13 case if you can’t get current right away.
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