Q: Am I responsible for my lease if the company didn't reaffirm the loan?
I filed for bankruptcy in June of last year. I checked that I would like to reaffirm my lease. The company stated they never received notice until after it was discharged. I have been paying but my credit shows an outstanding balance which is not going down. If I decided to give the car back now instead of wait till February 2016, can the company show a charge off or repossession after the bk. Will I be responsible for an outstanding balance. No reaffirmation was ever signed. Thank you
A:
First, you do not reaffirm a lease or any other type of executory contract. Instead you assume the lease, which is a type of executory contract. The bankruptcy code states that to assume a consumer executory contract, you simply must send a letter to the lessor stating that you are assuming the lease. If you did not do that, then the lease was not assumed.
If the lease was not assumed, then you can return the auto and you are not responsible for the deficiency after the lessor sells the auto. However, the repossession did happened and it does not matter that you voluntarily surrendered the auto. Your credit report should show that that the debt was discharged in the bankruptcy and show that there is a $0.00 balance owed, but can show that the repossession occurred on the date that the auto was repossessed.
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