leased vehicles and bankruptcy

April 23rd, 2008 by Questions

if we file for bankruptcy are our 2 vechiles we have leased included? can we choose to keep one and not the other?

Questions

One Response to “leased vehicles and bankruptcy”



, Barton Goth GCO Bankruptcy Trustees said:

Unless the leased vehicle is given back prior to the filing of a bankruptcy they largely operate outside of a bankruptcy. Meaning, that if you keep the car you must continue to meet the terms under the lease contract. However, if you give the car back and shortfall, that is the remainder of the loan after the vehicle is seized and sold, would be cleared by the bankruptcy.

To make things more confusing the lease company doesn’t have to leave the vehicle with you. The have the right opon the filing of a bankruptcy to seize the vehicle. This doesn’t mean they will seize the vehicle, just that they can, although in most situations I find the lender prefers for the debtor to keep the vehicle.

This is an important issue to discuss directly with a local trustee as it can often depend on whether or not your payments are up to date, whether or not you can afford to make the payments and the local practices of the lenders, all of things that the trustee will be able to help you out with.

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