Information on voluntary surrender of lease - The Bills.com Blog

Thank you Bill your information was very helpful.

I have a car that I was paying until it broke down on me. I'm upside down on the loan and the amount to get it fixed is close to the cars worth, very close, about 1000 off. I called and tried to work out arrangements to get a new loan since it was through a credit union and was told that the market is making it harder for people like me to qualify for a loan. I thought of bankruptcy, but instead called and spoke with them telling them to come get the car and work on a settlement with me. The thing is I don't want to pay anymore than 1000 on a settlement since the car is worth 3000 and I still have 7000 left to pay how can I negotiate something that wont cost me so much out of pocket?

There is no set method to negotiate. You just have to state the facts as they are and let them know that the car is worth only so much, but remember that regardless of the current value of the you still owe them the total loan amount, meaning if there is a shortfall in the amount even after the vehicle is repossessed, you still owe them the balance on the loan. The only difference now is that the debt is unsecured with out any collateral on it, just like credit card debt.

i was in a leased vehcile and they reposessed it. I am wondering 2 things. One if there is anything i can do now to stop this process from happening meaning paying the past due amounts. And two what will be my balance that i owe?

You will have to speak to your lender to see if they are willing to release the vehicle if you make all the overdue payments. As for the balance, you will owe whatever the balance of the lease payments plus repossession fees etc.

Went thru a bankrupcy in 2007. Have a leased vehicle which was listed as a part of that Chpt 7 filing. Received discharge 11 months later. Called bank mailed copy of discharge. They requested I sign a reaffimation of debt. I did not. I continued to make all payments during and after the bankrupcy.I have all bank statemts and cancelled checks. I am now at the end of the lease called to check on retun procedure was told car was in repo status. Shocked and very angry. Called back to speak to supervisor or manager never allowed to transfered from agent to agent. Should I turn this car in, as lease in completed. Will I be charged with voluntary repossession.

Your vehicle was included in your Chapter 7 bankruptcy despite the fact that you continued making the payments—had you wanted to keep the vehicle under the terms of your agreement with the leasing company, you would have needed to sign a reaffirmation agreement to “reaffirm” on the debt. A reaffirmation agreement outlines the terms under which a secured creditor will allow you to keep a vehicle that was included in a bankruptcy filing—usually this simply means continuing making your monthly payments as originally agreed. However, since you did not sign a reaffirmation agreement, your debt to the leaseholder was very likely discharged, meaning that you may not owe the company anything, but you are also not legally entitled to keep the vehicle. Since this is a lease, and since the lease term is nearing its end, the best thing to do may be to return the vehicle. A repossession should not report on your credit report; rather, the account should appear as discharged in bankruptcy. I strongly encourage you to consult with your bankruptcy attorney to discuss this matter and to determine the best way to proceed. Your attorney should be able to tell you what action you should take to rectify this situation.

I have a current car lease and have never missed a payment; however, I may lose my job July and I want to know if I can get out of the lease, or, if I get a new lease for less money and the new car company buys out my old lease is that an option. Any help would be appreciated.

Start by determining how much a lease trade is going to cost you. Depending on your particular lease company, you’ll probably have fees associated with trading in your lease. You may have an early termination fee, fees for going over the mileage allowance, fees for the condition of the car or other penalties. Consult your existing lease for any language governing a lease trade, including early payoff and termination penalties. No matter what a dealer tells you, the only organization that can change or end your lease is the institution that holds it. Unscrupulous dealers use a number of lease trade scams to run up fees and penalties if you trade in your lease, all the while telling you they’re getting you a deal. Consult your leaseholder directly so you know the cost for a lease trade.

I have a leased vehicle with over a year in payments remaining. I have a financial situation that demands I reduce my monthly payments by at least $500.... I have no choice but to seriously consider a voluntary surrender of my lease. I am very confused by the conflicting information I have recieved.: 1) From finance company: My "remaining balance" is $23,000 which includes all lease turn in fees. They will sell vehicle at auction and anything they get will be applied to the $23,000. I have a friend in the industry telling me my car sells for over $30k at auction, which would more than cover my "remaining balance". Sounds too easy. 2) from Dealer: don't believe the finance company. I am responsible for the "payoff" of the vehicle (which is $42k and is the "payoff to own" I am quoted when I call). This amount plus the "bogus fees" they will charge me at auction (towing, etc.) is truly my obligation if I voluntarily surrender the lease. Help!! This same dealer misrepresented my lease among other issues when I took possession of the car... I don't know who to trust and if I am going to consider ruining my good credit then I want to be sure I am not both ruining my credit and creating more debt. Any advice is greatly appreciated.

What I'm about to write is more for the benefit of other readers, because you've already learned your lesson: Do not sign an agreement you don't understand. You need to go to a good contracts attorney and ask him or her to decipher your lease agreement. Then, if you make no headway with either the finance company or the dealer, let your attorney talk with both.

What about surrender fee's at lease end, are they legal? Even 1 month before lease ends, all payments made, etc.?

Hypothetically, if you terminate a contract before the end of its term, then the breaching party must pay the agreed-upon damages. However, if the damages are punitive or unreasonable, then most courts will rewrite the contract and find a reasonable amount of damages the breaching party must pay. The real question here is, are the early termination fees reasonable? If a court finds that they are, then they are legal. If they are punitive, then a court will find that they are not.

I have a lease 2008 honda civic that was rear-ended recently. As I am looking to get out of the lease and have tried everything without much success, I am thinking of using the money for its repairs to purchase something cheaper and do a voluntary surrender as is. How much would this hurt me? Can one trade it in as is for a down payment on another car or outright purchase of a used car? Please help

You are wise to try to save money. However, your ideas for doing so require more thoughtful consideration. A lease is an agreement where the owner of property allows someone to use it for a period of time in exchange for money. A vehicle lease usually contains language that requires the lessee to maintain the vehicle properly, make repairs, keep insurance, and not drive more than a certain number of miles annually. A lessee does not have the right to sell the property (that exceeds his/her rights). Therefore, your idea to trade the Civic to buy a cheaper car will not be successful. Also, if you reach the end of the term without repairing the collision damage you will be liable for the lessor's expense of repairing the car. Finally, if you return the car before the end of the term you will be responsible for the lease balance, which is the unpaid portion of the adjusted capitalized cost of the lease.