Default

• Missing a payment on your car lease can send your account into default; once in default, a number of negative legal ramifications can occur. The car lease contract must explicitly state what conditions must occur for the account to be considered in default, but one missed payment is often the rule. The rights a creditor has once the lease is in default is subject to state law.
  
  

How to React

• The moment you think that you might have problems making a lease payment on your automobile you should inform the dealership that issued the lease on your car. Lessors make no money if they have to close down the lease and repossess the car, so they have a vested interest in helping you achieve regular payments. Often the situation causing the inability to make timely payments, such as a job loss, are temporary problems, and a dealership might be willing to wait until that problem is rectified before considering the lease to be in default.
  
  If a lessor decides not to help and allows the account to default, you should obtain the proper legal help to guide you through the possible repossession process.
  
  

Repossession

• Although a creditor's rights over an account in default are subject to state law, this often means that the creditor can begin the legal process of repossessing your vehicle. This repossession may happen whenever the lessor decides, and he is legally able to take the car from the defaulting lease holder's property. However, a creditor may not commit a breach of the peace, which includes threats of force or forcibly removing the car from a garage. If this occurs, the creditor may be subject to fines payable to the defaulting lease holder.
  
  

Options

• Although much of the fallout after a lease defaults can be negative, there are ways to minimize the damage that you take on financially. If you cannot get your creditor to consider keeping the account out of default, paying off the balance of the lease through a credit card will keep the defaulted lease from negatively impacting your credit report. Buying out by paying off the lease and purchasing the car accomplishes the same goal but costs more money. You can also look at trading your lease to another person who would take the car and finish out the terms of your lease; this removes the liability on your personal finances.