1. Lease Termination:
- Voluntary surrender of a leased vehicle during bankruptcy is considered a lease termination.
2. Early Termination Fees:
- Your lease agreement likely has provisions for early termination, including fees and penalties. You may be liable for these fees even after bankruptcy.
3. Remaining Lease Payments:
- The leasing company may seek payment for the remaining lease payments that you would have been obligated to make.
4. Disposition of the Vehicle:
- The leasing company may sell or dispose of the vehicle to recoup their costs.
5. Deficiency Balance:
- If the proceeds from selling the vehicle are less than the amount you owe on the lease, the leasing company may seek a "deficiency balance." This is the difference between the sale proceeds and the remaining lease obligation.
6. Bankruptcy Protection:
- Depending on the bankruptcy chapter you filed for and the terms of the lease agreement, your lease may be considered an executory contract. Executory contracts might be subject to rejection or assumption during the bankruptcy process, which could affect your liability.
7. Creditor Response:
- The leasing company may approach you to settle the debt. They might offer a negotiated settlement amount that is less than the full deficiency balance.
It is important to note that bankruptcy laws and regulations can vary, and lease agreements can have specific terms that may impact your situation. It's recommended to consult with an experienced bankruptcy attorney to understand your rights and responsibilities regarding your leased vehicle and the bankruptcy process.
