I have leased two cars in my lifetime, and it was two of my worst financial mistakes. The first car was turned in at the end of the lease, and I was grateful to be rid of it, so maybe that wasn’t so bad. It was a new model introduced in America, and it had several mechanical problems. The second car wasn’t so bad, but I purchased it at the end of the lease, which resulted in me virtually paying twice for the car. Leases aren’t so bad for people that need a tax deduction on their business return, but the average wage earner has no business leasing a car. They never own the vehicle, and they stay locked into a constant car payment.
Furniture leases are even a worse financial mistake. We frequently have clients come to us where they have leased their bedroom and living room furniture and maybe a new big screen television. The result is ownership of furniture or appliances that have cost the person as much as three times what they would have paid on a purchase. And the product is usually of a lesser quality and may be worn out by the time they finally own it.
So what happens to a lease in a bankruptcy? Leases are accepted or rejected, which means in plain language the client has the option of accepting the lease and continuing the payment, or they can reject the lease and walk away from the contract. Those choices may not have been available before without resulting in a lawsuit, but a bankruptcy might be able to fix a bad lease, meaning you can walk away from a bad deal. If you are upside down in a lease, or you have exceeded the mileage permitted in your car lease, call us for an appointment and let us take a look at your contract. We are problem solvers and might be able to help.
Leave a Reply