CAN I KEEP MY LEASED VEHICLE? PART 2
In the first Part, I wrote about whether when you filed a bankruptcy, would you automatically lose a leased vehicle. As I discussed previously, the filing of a bankruptcy will not cause you to lose your vehicle. There are many things to consider when deciding to keep or get rid of a leased vehicle. I understand how poor the public transportation system is in the Charleston, South Carolina area. So what should you do regarding the keeping the vehicle or giving it up. Your options are limited if the contract is actually a lease.
If the contract is, in fact, a true lease, then a debtor must assume the lease if the debtor wants to keep the vehicle the payments must be made the way the contract states that it must be paid. There is no modification of the monthly payments allowed. Each payment that comes due after the filing must be made as the payment comes due. There is no grace period allowed except as set forth in the contract.
Because payments coming due after the filing must be paid when it comes due, the timing of the filing of a bankruptcy case should be planned. If the payment comes due one day after the date of filing, then the debtor must be ready to pay the payment that comes due one day after filing. As you can tell, timing is important. A competent attorney will take these sorts of issues into consideration and plan the filing to take into account this issue when deciding when to file your case.
Of course, your attorney has lots of other cases and issues to watch. You should review your lease and watch this issue. Cases filed in Charleston, South Carolina, Columbia or Spartanburg will all have the same result.
There could be a different result in another state as what is a lease is determined by state law. Some states, such as South Carolina, have passed very creditor friendly statutes. In those states, the creditor dominated legislature has made the definition of what is a lease is very broad. If the document is a lease, then your rights are very limited.