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I am filling for Chapter 7 bankruptcy in California. I have a leased car which is co-signed by my brother. What to do to keep it

Glendale, CA |

I have heard that I can do something like reconfirmation agreement. Do I have to prepare it, or if I contact Toyota will they prepare it for me? If I have to contact them, should I contact them before I file? Thank you.

Attorney Answers 4

  1. So long as you are current with your payments, you can contact Toyota (ideally after you file) and advise them that you wish to reaffirm this debt. They will prepare and send you a reaffirmation agreement (or since this is a lease, a lease assumption agreement) for you and your brother to sign and return. They then will file the agreement with the court. So long as you keep the payments current, that should take care of the issue. One caveat however, reaffirming this debt may not be in your best interests, depending on your complete financial situation. You should consult with a local bankruptcy attorney to make sure a reaffirmation in your situation would be in your best interests.

  2. You are referring to a reaffirmation agreement, which is an agreement that the lessee would sign if he wanted to keep the leased vehicle through the term of the lease. I have had mixed experiences with Toyota leases. I had one case where Toyota refused to enter into a reaffirmation agreement unless the lease was first brought current. I suggest you talk or your brother (if he is the sole lessee) speak with Toyota before you file.

  3. Just call Toyota and ask for the bankruptcy department. Tell them to send you a reaffirmation agreement for our car.

    If you were represented by an Attorney they will send it to him or her.

    Jonathan Leventhal, esq.
    Leventhal Law Group, P.C.

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  4. I have a slightly different take on this issue. Leases and other executory contracts are not things to be "reaffirmed". They can be assumed or rejected by the Ch7 Trustee, but are nearly always rejected. You can assume them by simply letting the lessor know that you are doing so and obtaining his consent. The lessor may wish to put this assumption into their preferred form, but it does not have to be filed with the court.
    Moreover, even if you don't assume the lease, your brother is still on the hook for it ... so just keep up the payments and you'll be fine. If you don't keep up the payments (because you no longer want the car), you'll still be fine ... but your brother won't.

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