Car lease

If you have a car lease bankruptcy gives you options.  When you file bankruptcy, your car lease is treated as what is called an executory contract and you can either assume or reject that executory contract, that is, you can assume or reject your car lease.  Assuming your car lease in bankruptcy means that you choose to keep your car and continue to make your lease payments as you did before bankruptcy. Rejecting your car lease means you choose to give up the car and stop making your lease payments.  Your liability for future car lease payments is eliminated and there are no lease overages or any other charges.

How Car Leases Are Treated In Bankruptcy San Diego

Bankruptcy car lease treatment in San Diego depends upon whether you are filing bankruptcy under Chapter 7 or Chapter 7.  Each Chapter has its own procedure for treatment of car leases in bankruptcy.  Both Chapters allow you to continue your car lease and keep your car when you file bankruptcy.  Each Chapter has its own benefits and each Chapter has its own particular uses.  Both Chapter 7 and Chapter 13 bankruptcy allows you to assume or reject, but each Chapter has its own unique legal procedure.

Car Lease In Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy, the bankruptcy trustee has 60 days to decide whether to assume or reject your car lease.  In practically every case, the bankruptcy trustee will reject your car lease because it has no value to the bankruptcy trustee and it is too burdensome and of little or no value to administering your bankruptcy.

Typically, the San Diego bankruptcy trustees will not do anything (they are very busy) and after 60 days your car lease will be deemed rejected since the bankruptcy trustee did not act.  Once your car lease is deemed rejected, you can assume your car lease if you want by notifying your car leasing company or finance company, in writing, that you want to assume your lease and keep your car.

In a Chapter 7 bankruptcy car leases will generally be assumed by you, at your option, unless you don’t want to keep your leased car anymore, you can give up the car and let the car lease remain rejected and you need not make any further lease payments to the car leasing company or finance company.

Car Lease In Chapter 13 Bankruptcy

In a Chapter 13 bankruptcy, the bankruptcy trustee has until your Chapter 13 plan confirmation hearing to either assume or reject your car lease.  In almost all cases, the San Diego bankruptcy trustee will reject your car lease since it will be too burdensome or of little or no value to the administration of your bankruptcy case.

Once the bankruptcy trustee rejects your car lease you will have the option to assume or reject your car lease.  In practice, you will propose a Chapter 13 plan that either assumes or rejects your car lease, at your option, and your choice will be confirmed because the trustee will reject the car lease, deferring the option back to you. 

Despite the technical aspects of car lease treatment in Chapter 13 bankruptcy car leases are generally a benefit that you will get to keep when you file bankruptcy in San Diego.  An experienced bankruptcy lawyer can help you propose a Chapter 13 plan assuming your car lease that will be approved by the bankruptcy trustee and the court.