Is filing for bankruptcy the only way to get out of my medical leases? 14 Answers as of January 16, 2012

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.

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The Law Office of Marvin Wolf
The Law Office of Marvin Wolf | Marvin Wolf
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
Lakelaw - Loop Bankruptcy
Lakelaw - Loop Bankruptcy | David Leibowitz
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: 1/3/2012
J.M. Cook, P.A. | J.M. Cook
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
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
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
Ryan Legal Services, Inc.
Ryan Legal Services, Inc. | Kevin Ryan
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
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    You can file a chapter 7 and surrender the property secured by the lease.
    Answer Applies to: California
    Replied: 12/29/2011
    Bankruptcy Law Center
    Bankruptcy Law Center | Bill Zurinskas
    It is possible to reject leases in a chapter 7 bankruptcy also.
    Answer Applies to: Colorado
    Replied: 12/29/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    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
    The Law Offices of Kristy Qiu
    The Law Offices of Kristy Qiu | Mengjun Qiu
    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
    Mazyar Hedayat and Associates | Mazyar Malek Hedayat
    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
    Weber Law Firm, P.C.
    Weber Law Firm, P.C. | William Weber
    Yes, bankruptcy is the only way to legally terminate the lease unless the landlord voluntarily releases his rights under the contract.
    Answer Applies to: Texas
    Replied: 12/29/2011
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If you do not need the equipment, and if you qualify, then you could surrender the equipment in a chapter 7 as well. But you should speak in more detail with your attorney.
    Answer Applies to: New York
    Replied: 12/29/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    Well, I'm not really sure Chapter 13 is the only way to get rid of the leases. Assuming you qualify, you could file Chapter 7 as well. Without knowing more, I couldn't tell you which Chapter makes more sense for you. I'm assuming you do not want to keep this equipment, correct? I ask because obviously, if you discharge their debt, they are entitled to their security back, although I assume you are well aware of that.
    Answer Applies to: California
    Replied: 12/29/2011
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    If the creditor is not willing to work out a deal with you, then I do not see any other option to get out of the deal besides filing a bankruptcy.
    Answer Applies to: California
    Replied: 12/29/2011
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