What can my father do if he owes an earlytermniation fee on a car lease, but has no money?

UPDATED: Feb 25, 2011

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What can my father do if he owes an earlytermniation fee on a car lease, but has no money?

My father is currently unemployed and has no assets. He was no longer able to afford the lease payments so he didn’t pay it for a couple of months and finally he returned the car 1 month before the expiration of his lease. We got a letter about the “gross early termination” amount. And depending on how much they sell the car for, we are going to owe the difference (which is the deficiency). Can they sue him in court for the deficiency? Will they if they see he has no assets? Could it be possible that they will just bill him and it will go to collections?

Asked on February 25, 2011 under Bankruptcy Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

There's legally and there's practically.

Legally, unless the agreement allowed early termination without penalty and your father followed those terms, he is responsible for any deficiencies and also for any early termination penalties or fees provided for in the agreement. So legally, the creditor has the right to proceed against him for these amounts, whether by turning it over to collections, suing him, etc.

Practically, depending on the amount, it may not be worth their pursuing him--but that's their call to make. They can decide what to do. If you could pay some of the amount due by your father for him, you may be able to get them to settle; but if you can't or won't do that, or they won't take a settlement, you need to wait see whether they will sue him or take other action. If they do, one option for your father would be to file for bankruptcy to eliminate the debt.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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