Sooyp

I am moving back home within the next 4 weeks to the UK from the US following my employment being terminated - not my choice. Whilst during one the most stressful phases in my life I have attempted to settle most of my remaining dealings here, the outstanding car lease remains a reoccurring headache.

I have agreed with the car loan company that I hand in the motor and keys to the dealership where I took the initial lease out but I will still owe $9000 on the remainder of my repayments.

When I spoke with the car loan company they said there was no negotiation on the remaining figure which leaves me in a sticky situation as I have no employment waiting for me when I return to make any payments.

I suppose my options are to 1) default on my payments and incur the wrath of credit bureaus and bad credit scores or 2) pay the monthly lease amounts should I find employment but this is a big unknown whether i will find something quickly or not.

Does anyone have any experience of being in this exact position I find myself? Does defaulting in the US have repercussions attaining credit in the UK? Will reentering the US in future (whether for work or holiday) become a problem if my outstanding debt be passed to a debt collector?

My son was born here and I hope he gets the chance to come back one day and see the place he was born, hopefully he is not impacted in any way for mistakes made by his parents years ago.

Pulaski

Bad debts and credit issues are not a visa/immigration issue, and you cannot be arrested for defaulting on a debt. Fraud is a whole other matter.

If you get another job offer in the US, the matter if the lease won't be an issue at all, though it will affect your credit score for seven years front the date of the default.

As you can't take your car with you, nor can you sell it*, you (morally) shouldn't have to pay for an asset you aren't benefiting from the use of.

If the lease company refuses to reach any sort of negotiated settlement, I would just walk away - give the dealer the keys and the vehicle.

* You can actually sell a lease, but I don't know how practical it is nor how long it might take to find a buyer.

holly_1948

If you do decide to default (and most people would) then it is important to find out what is the statute of limitations applicable. For most states it is 3 years for verbal or internet contracts and either five or six years for contracts with papers signed in ink. But it all depends on which state has jurisdiction.

It is crucial to note that if you make any payment, no matter how small, or put almost anything in writing by way of admission that resets the clock. So if you do default it is important not to communicate with the creditors any longer. Simply do not answer their letters or phone calls. Silence, not denial nor excuses. They are not going to pay lawyer fees and pursue anyone in a foreign court over a paltry (foreign and paltry to them) $9000.
Just make sure you get evidence (typically photos) of actually returning the vehicle so that the claimable amount is "only" $9000 and not some crazy sum (eg full retail price of a brand new replacement vehicle plus extras for "loss of use").

holly_1948

Very minor quibble, but it is seven years from the last payment. Not seven years from the first default (there can be more than one default, indeed a few naive people can be in and out of default for years on end).

Pulaski

Thank you. I was assuming one default, but yes it is possible to default multiple times on the same debt.

Sooyp

I made a 2nd call to the lease loan company, apparently this time Im told the remaining fee will be $28000 because of early termination plus additional fees. Will that higher amount be significant enough for them to take me to court in the UK?

The guy suggested that i leave the car with someone i trust in the USA and whilst continuing to make the payments have them turn in the car when my lease is up.

vikingsail

I fear from your last post that they make have gotten wind of your intentions so to speak! Or experienced similar in the past so they are already loading the frontend.

Me I would go for a third phone call, same principle as quotes. Thus, perhaps calling the national company for your vehicle type and getting details from them is a good idea. And have someone else call the dealership with a similar situation to see what they are quoted?

Fyi there are web companies out there where you can sell on a lease:

https://www.swapalease.com/exit-leas...FQZrfgodxtgMOw

Get out of a car lease, Lease termination early, How to get out of a lease, transfer and break lease - LeaseTrader.com

Simple Google search revealed these. I have never used but perhaps worth investigating? They seem to be reputable.

Pulaski

So the payment has just treble because you are turning in a newer, lower mileage car than if you completed the lease term? Sorry, that's just BS and they are trying to scare you.

They would need a judgment against you in the US and then a British lawyer to take the judgement to the UK to obtain a court order there - before you know it they've spent $10,000+. And remember they can only claim for actual losses, net of any recoveries/ mitigation, such as getting back a newer, lower mileage car than if the lease ran it's term.

IMO the $28k is pie in the sky, and the recoverable amount, net of mitigation, is likely not more than about $5k. If anyone at the lease company had half a brain they would tell you the honest figure is $5k, and if pushed settle for $3k. Unfortunately there probably isn't anyone at the lease company with half a brain.

Sooyp

Thanks Pulaski but I think the only thing that scares me at this point is it affecting my credit back home in England.

Being here on a temporary visa does makes any attempt at credit a very risky proposition but I always told myself I would never find myself in this situation.

Pulaski

That is extremely unlikely because of US Privacy and UK Data Protection legislation, which pretty much stops international transfer of personal financial data, and the prospect of anyone chasing you across the Atlantic for a gross debt of $9,000 is vanishingly small.

Just be sure, if they track your address to the UK, which is certainly possible, to ignore anything they send you, because engaging on any level will only inflame the situation.

holly_1948

That (above) is the crucial part.

Return the car, make photographic evidence of doing so (additionally a witness friend who can keep his mouth shut would be nice but not essential), and above all do not sign any further papers related to the car. Except the official government DMV paperwork of course. Official government forms only.

Dealer employee: "Oh, you're return a lease car, sign here purely a routine paper giving us permission to take possession of the car".
You: (picking up the papers before making for the door) "Oh, I have to get all papers checked by my attorney, I'll mail them to you after he approves them". Obviously the attorney will not approve, simply because he does not exist :-)

The only bad effect will be that you will not be able to lease another car in the USA for seven years (it doesn't sound like you care about that very much).

And if you are still making payments, stop now, spending that money now will do you no good. Assuming you will be turning the car in within a few weeks.

VeryVeritas

I don't think defaulting on a lease here will affect your credit in the UK. I also think the settlement charge they are now claiming is bogus. Ask them to break it down in writing. I would absolutely not take their advice of "leaving it with a friend" and paying. You would also need to insure it against loss and it makes no sense. If by some miracle this comes up in the UK, you would state the extenuating circumstances: you were terminated by your employer, had to move back to the UK and had no way to pay the balance. And it is doubtful, even if known, that you would be refused a lease or credit in the future--it would likely just increase the down payment/interest/payment--on either side of the pond. Also, that asset is not just going to sit in their parking lot. They are going to re-lease or sell the car, and maybe write off the remainder of the loss. However, they may sell the debt to an overseas credit collections firm and that is where it is very important that you actually know what is owed and what fees can be assessed when the car was turned in. Your original lease should shed light on this. I cannot imagine the final figure ballooning to what you have been told. And either way, it might benefit you to actually try to sell the lease. Many years ago my husband spent a couple nights in a hospital abroad. He paid when he checked out but there was, unbeknownst to him, a balance owing. Never received a letter to this effect or any other communication even though they had all contact information. However the hospital gave the debt to a US based collections agency and when they contacted us, we were very surprised. We then called the hospital and simply paid it. However the collections agency tried to get us to pay more than the bill, and it was an amount many times what was actually owed, even after it was paid in full. I got on the phone, told the collection agent it would be a cold day in hell before I dealt with him again, whereupon he told me to F*** off, slammed down the phone, and was never heard from again. But am told that collection agencies will say whatever they can to collect money and they are paid based upon what they bring in. So to protect yourself you should gather more data IMHO.

petitefrancaise

Iknow it's not applicable in this case - I feel so sorry for you OP- but I believe that if you have a lease car through IAS and you have to leave the country before the end of the lease then yousimply hand the car back to them. I have been told it's one of the reasons they are more expensive than normal lease companies.

dave2003

Don't know about car leases in the U.S.A. but when I lived in Canada, there were quite a few companies offering settlements for outstanding leases. One such company was called Lease Busters. They would take on responsibility for a lease, then lease it to a another party.


This is not a free option, there are fees, but apparently much less than the cost of maintaining a lease to term. This route allows a distressed lessee to at least not incur bad credit reports.