Understanding your rights and the available exemptions is critical in making the best use of the protections afforded you when filing for bankruptcy in Colorado.
The Denver bankruptcy attorneys at George T. Carlson & Associates will sit down with you, review your personal financial situation, and help you decide upon the best course of action. In general, leased automobiles are not considered an asset and so can be kept throughout the bankruptcy process, regardless of the type of bankruptcy you choose.
Bankruptcy in Denver: Cars and Questions
- You can keep a leased vehicle, but should you? One of the chances bankruptcy offers, is the opportunity to start fresh. Thinking differently about money is part of that equation. How will your leased vehicle fit into your new budget?
- Are you in trouble on mileage? Many leases come with unrealistic mileage figures with a per-mile fee that can add thousands to the cost of your lease at the end of the term. Is your lease a liability?
- Does your lease have balloon payments at the end?
- Do you also own a vehicle with less than $5,000 in equity? Bankruptcy laws permit you to keep a vehicle if the difference between what you owe and what a vehicle is worth is less than $5,000.
In other words, the question you may need to ask yourself is not whether you can keep a leased vehicle through bankruptcy, but should you? Often, the only deal worse than a new lease is a lease nearing the end of its term when mileage fees and balloon payments are due. Proper planning of a Colorado bankruptcy should include whether or not keeping a leased vehicle is right for you.
Car Leases in Colorado: Chapter 7 and Chapter 13 Bankruptcy
How you file for bankruptcy can have an impact on your auto lease. How you handle the lease should be part of your bankruptcy planning.
- Chapter 7 Bankruptcy: You can choose whether or not to keep the vehicle. In some cases, continuing to make the payments and keeping the vehicle can make the most sense. In other cases, surrendering the vehicle back to the manufacturer can make the most financial sense. Any financial obligations involving the vehicle will be surrendered through the bankruptcy proceedings.
- Chapter 13 Bankruptcy: You cannot repay a car lease through a Chapter 13 filing; though you can continue to make the monthly payments outside the bankruptcy plan by “assuming” the lease. You may also decide to “reject” the lease and can return the car to the creditor. The creditor will sell the vehicle and may file a claim through bankruptcy proceedings for the balance due. But since the debt will be low-priority unsecured claim, you will likely only be forced to pay pennies on the dollar.
Contact a Colorado Bankruptcy Attorney Today
If you need bankruptcy assistance in Denver or would like more information, call George T. Carlson & Associates today at 303-789-1313 for a free consultation or contact us online. We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code. Serving clients in Denver and throughout Colorado, including Aurora, Englewood, Lakewood and Boulder.
Over 40 Years Experience since 1972.
Denver Bankruptcy Help – 303-789-1313 – Free Consultation
