If an individual is having trouble managing their debts, they can file for bankruptcy as a last resort. Filing for Chapter 13 bankruptcy in Florida gives an individual the chance to pay off their debts over a period of three or five years. If a leased vehicle is part of their debt, they need to decide whether they want to continue paying off the vehicle or relinquish ownership of the car. Here’s what can happen to a leased vehicle after an individual files for bankruptcy.
What happens to a leased vehicle after filing for bankruptcy?
Once the individual has filed for Chapter 13 bankruptcy, they might decide to keep the vehicle. However, they’ll have to continue making payments to keep the car from being repossessed. They’ll also still be responsible for any overdue payments that have accrued over time.
If the individual can’t afford their lease payments, they can reject the lease. The individual will no longer be responsible for the rest of their payments, but they’ll also lose ownership of the car. For this reason, this option is only viable if the individual doesn’t need the vehicle. They might also have to pay additional fees related to early termination of the lease.
How to safely file for bankruptcy
Once an individual has made the decision to file for Chapter 13 bankruptcy, they might want to hire an attorney as their next step. An attorney may help their client figure out which form of bankruptcy they should file for.
The attorney may also gather documentation and file the right paperwork to make the process as smooth and efficient as possible. An attorney may be able to help their client manage a wide variety of debts, including property leases, medical bills, mortgages, loans and much more.