Bankruptcy to get my name and liability off a commercial lease?

[geoffois]

What is the name of your state (only U.S. law)? California

I defaulted on my commercial lease and also owe back rent. I don't owe too much to vendors, but the commercial lease rent is high. I am not be sued for future rent yet, but my question is: If I file for chapter 7 and am granted it, will that get me out of the liability of the lease? Or do I need to wait to be sued in order to be released from that obligation? For sure the cumulative debt of the monthly rent over the 5 years left on the least would be greater than 50% of all debt I have not counting mortgages. I don't want to wait to be sued years from now when I am more vulnerable.

 

[bigun]

You don't have to be sued to file bk. Just be certain you schedule the lease along with the rest of your creditors in your petition.

 

[geoffois]

Thanks Bigun

You don't have to be sued to file bk. Just be certain you schedule the lease along with the rest of your creditors in your petition.

Do you know how they look at leases as far as debt and creditors go? I mean, if my lease was $7k per month for 5 more years so $420 total. Would they view it as a debt of $420k and figure how that works as far as percentage of entire debt I have? I read an article that mentioned if your debt is greater than 50% non-consumer that one usually gets chapter 7. A lawyer told me they still look at one's income and one could possibly get a chapter 13 only. How much income would one have to have to not be given chapter 7 for nearly half a million in lease debt? I'm just trying to plan for the future=/.

 

[bigun]

You file the chapter of bk you qualify for.
Yes, if over half your debt is nonconsumer you are exempt from means testing but still must fill out schedules I and J to determine if you have enough monthly disposable income to fund a chapter 13.
Keep talking with lawyers and prehaps post at Bankruptcy Forum
There are few people there who have experienced filing with over half the debt load nonconsumer and can help you in some detail.

 

[HomeGuru]

What is the name of your state (only U.S. law)? California

I defaulted on my commercial lease and also owe back rent. I don't owe too much to vendors, but the commercial lease rent is high. I am not be sued for future rent yet, but my question is: If I file for chapter 7 and am granted it, will that get me out of the liability of the lease? Or do I need to wait to be sued in order to be released from that obligation? For sure the cumulative debt of the monthly rent over the 5 years left on the least would be greater than 50% of all debt I have not counting mortgages. I don't want to wait to be sued years from now when I am more vulnerable.

**A: who are the guarantors of the lease and is the lease in your name or the company (corporation) name?

 

[geoffois]

Ok thanks, I will post there too.

I really want to know if I even need to file now or I can wait. I'm not as worried about equity in a house since values are down, mainly if I should even get a job or file first. Hopefully someone who has gone through it can tell me how it went.

Hey HomeGuru,

There is the landlord(Lessor), and assignors(original lessees), and assignees(myself and my partner). There was an assignment of the original lease to me and my partner. In says that when we default that the assignors can take back the business and run it and sell it if it is within the first 3 years of the assignment. Myself and my partner both personally signed the assignment. Does this make a difference as far as liability? If the LL sued, would it have to have all 4 of us(assignors and assignees)? Since we defaulted back in December and owe for Dec and Jan, shouldn't the assignors have been held liable to take over business back when we defaulted in Dec? Sorry, I am getting off the bk topic. I should ask these questions in the other section.