Bankruptcy Schedules

• Disclosure of the auto lease terms must be included in the Chapter 13 bankruptcy case. The court requests the name and address of the leasing company in Schedule G of the bankruptcy petition. A description of the car and the last four digits of the account or contract number associated with the auto lease must also be provided. The debtor can include this information himself by downloading a copy of the Chapter 13 petition from the Bankruptcy Forms section of the U.S. Courts website or he can provide the lease information to his attorney.
  
  

Assume the Auto Lease

• The Chapter 13 plan is a three- to five-year payment plan that states the amount of money the debtor will pay his creditors. The auto lease is assumed in the Chapter 13 plan when the debtor wants to keep the car. Assuming a lease means the debtor agrees to abide by the terms of the auto lease. Typical lease terms include the continuance of timely payments and maintaining auto insurance. The leasing company's name, a description of the car, the monthly payment amount, the contractual interest rate, and the total amount of any late payments should be included in the Executory Contracts and Unexpired Leases section of the Chapter 13 plan.
  
  

Rejection of the Auto Lease

• Failure to include the auto payments in the Chapter 13 plan leads to the assumption that the auto lease will be rejected. If the Chapter 13 plan does not show the debtor's intent to continue making auto payments, the leasing company will want to protect its security interest and regain possession of the car. All Chapter 13 payment plans must be approved by the court. The leasing company can repossess the car if lease payments are not included in the case by the time the court approves the Chapter 13 plan.
  
  

Defaulting on Lease Payments

• Carefully assess monthly income and expenses. Assuming the auto lease in the Chapter 13 plan should only be done if the payments are affordable. If there were any late payments due when the case was filed, those late payments must also be paid to the leasing company during the bankruptcy. If the payments do not remain current throughout the bankruptcy, the leasing company can file a motion with the court and request permission to repossess the car.