Expert: Mark J. Markus- California Bankruptcy Attorney - 6/18/2004

Question
Hi,

I am considering filing for Chapter 7 bankrupcy; however, prior to consulting an attorney I intend to speak with a credit counselor which I hope to locate through the National Foundation for Credit Counseling.  If my situation is hopeless, then I will meet with an attorney.

I have two related questions:

  
1. I presume if I file bankrupcy my auto lease would be called due so to speak and my car reposessed...is that true or are there other options BK laws offer that'd allow keeping an automobile.  I do need a car one way or another with or without BK.

2. This automobile is under a lease which I would love to break, how do I do that or where would I go to learn how?  The payments are sadly more than I can afford and presume I owe more than the car is worth.

I created this financial crisis primarily due to my financially iliteracy.  The bright side is that I have a solid scholastic education and will learn from this lesson and educate myself financially in the future.


Thanks so very much!

Cheri

Answer
1. No that is not true.  If you are current on your payments there is no legal basis for them to repossess your vehicle.

2. You break it by turning in the vehicle and not making your lease payment.  The bankruptcy discharge would then release you from any further obligations.