Is filing for bankruptcy the only way to get out of my medical leases? - Bankruptcy Law Questions and Answers- LawQA.com

Free Answers to your Legal Questions by Lawyers.
ask »


Is filing for bankruptcy the only way to get out of my medical leases?

I have several medical equipment leases and have been losing money in my business each month. I spoke to a bankruptcy lawyer who said the only way to get out of these was to file chapter 13. The companies have been unwilling to renegotiate. Another equipment company wants to lease me their equipment and said that their lawyer would have no problem getting me out of my current leases and warranty agreement so I could lease their equipment. I'm not interested in leasing more equipment but would like to get out my current leases if at all possible.

Answer By Marvin Wolf
The Law Office of Marvin Wolf
Contact this Attorney Now

Your question is too complicated for an open form discussion. For one thing, if the leases are in company name, companies are not allowed to file Chapter 13 - only individuals can file one. Secondary leases remind of the car lease scam where they throw the balance on the old lease on to the new lease.

Answer Applies to: New Jersey
Replied: 1/16/2012

Answer By David Leibowitz
Lakelaw - Loop Bankruptcy
Contact this Attorney Now

A lease is an executory contract which can be avoided in bankruptcy, either chapter 7 or chapter 13. In chapter 7, the lease company would hold an unsecured claim. In chapter 13, the lease company would also hold an unsecured claim which would be treated like other unsecured creditors. You should be able to get some credit for the sale of the leased property by the lessee. The terms of your lease control.

Answer Applies to: Illinois
Replied: 1/2/2012

Answer By J.M. Cook

Contact this Attorney Now

You can cancel the lease and return the equipment but that won't stop you from being liable for the remainder of the lease payments. A bankruptcy would get rid of your personal liability on the leases. The only reason you would need to file a Chapter 13 over a Chapter 7 would be if you wanted to assume the leases (of course, there are several factors in what Chapter you file under).

Answer Applies to: North Carolina
Replied: 12/30/2011

Answer By Janet Lawson
Janet A. Lawson Bankruptcy Attorney
Contact this Attorney Now

Ch13 is the best solution. I would not believe a sales person who says he can get out of a lease unless it is from the same company.

Answer Applies to: California
Replied: 12/30/2011

Answer By Kevin Ryan
Ryan Legal Services, Inc.
Contact this Attorney Now

Settlement of those contracts is entirely up to each respective creditor. Issues to consider: are you totally insolvent with no real equity in property? are most if not all of your assets exempt in your State, or encumbered by loans ? (such as an auto loan or mortgage(s) ). Chapter 7 may be an option but you MUST discuss the facts with a qualified bankruptcy attorney. You should find a lawyer who has at least 15 years experience and who handles 90% or more bankruptcy matters, not a lawyer who is a part time bankruptcy practitioner (sorry, but the area of law is as complicated as tax law in some asset cases). Get a 2nd opinion on the Chapter 13 recommendation.

Answer Applies to: Ohio
Replied: 12/30/2011

Answer By David VanDyke
Bird & VanDyke, Inc.
Contact this Attorney Now

You can file a chapter 7 and surrender the property secured by the lease.

Answer Applies to: California
Replied: 12/29/2011

Answer By Bill Zurinskas
Bankruptcy Law Center
Contact this Attorney Now

It is possible to reject leases in a chapter 7 bankruptcy also.

Answer Applies to: Colorado
Replied: 12/29/2011

Ashman Law Office
Contact this Attorney Now

You've already spoken to a lawyer, who has presumably reviewed the leases and given a likely correct answer. And you have heard from a company that wants to sell you things, knowing that many salesmen will lie to sell you things. Use common sense. Obviously one of the sources is right. Get a second opinion from another local lawyer to be sure, but obviously you would not seriously consider a lying salesman as more trustworthy than a lawyer you hired.

Answer Applies to: Georgia
Replied: 12/29/2011

Answer By Mengjun Qiu
The Law Offices of Kristy Qiu
Contact this Attorney Now

You will need bankruptcy in order to get out of these leases. You could file for Chapter 7 instead of 13 if you don't have a significant amount of asset.

Answer Applies to: Florida
Replied: 12/29/2011

Mazyar Hedayat and Associates
Contact this Attorney Now

To fully answer this question will require discussing it face to face. In the mean time I can confirm that Bankruptcy allows debtors to terminate all executory contracts, including the leases you describe. One caveat: it is not necessary to file Chapter 13 to defeat contracts. That same rule applies in Chapters 7 and 11 as well.

Answer Applies to: Illinois
Replied: 12/29/2011

© 2017 MH Sub I, LLC. All rights reserved.
Terms & Conditions | Privacy Policy | IB Cookie Policy