Question from JT, Is a Chapter 7 Debtor in California Required to Sign a Lease Assumption?
Answer from AI:
In California, when an individual files for Chapter 7 bankruptcy and wishes to retain their leased vehicle, they are required to assume the lease. This process involves the following steps:
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Assumption of Lease: The debtor must formally assume the lease, typically by filing a “Notice of Assumption of Lease” with the court. This indicates their intention to continue the lease agreement.
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Continued Payments: The debtor must remain current on lease payments as outlined in the agreement. Failure to do so may result in the lessor repossessing the vehicle.
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Lessor Approval: The lessor may require approval of the assumption, especially if the debtor is behind on payments. The debtor might need to catch up or negotiate terms.
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No Ride-Through Option: California follows federal bankruptcy law, which does not provide a “ride-through” option. This means the debtor cannot retain the vehicle without assuming the lease.
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Consultation with Attorney: It is advisable to consult a bankruptcy attorney to ensure compliance with all legal requirements and to address any specific circumstances.
In summary, to keep a leased vehicle in Chapter 7 bankruptcy in California, the debtor must assume the lease through proper legal channels and maintain timely payments. Legal advice is recommended to navigate this process effectively.
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