Question If I file for bk chapter7 and am granted it, does my liability commercial lease go..?

[geoffois]

I defaulted on my commercial lease after being evicted for not paying since the economy hit the business hard. I haven't been sued for future payments yet since the landlord is running the business, but to be safe for the future.

If I file for chapter 7 am I released from the liability of the commerical lease? The commercial lease is 99% of any debt that i would be filing to be released from. I am wondering if the courts will look at my income to make me pay some of the damages. I am unemployed now, and wondering if I should file bk now. I am just worried if I am making 60k in a couple years if they would say I can pay some of it.

[DeadManCrawling]

Is the lease backed by a personal guarantee? I assume so, since you asked at all, but wanted to make sure.

If so, filing will take care of it.

If you did NOT have a personal guarantee, then the lease cannot be collected from you anyway, in most but not all cases. Some of this depends on how the business was structured and how it was transferred.

[geoffois]

Thanks DMC

Is the lease backed by a personal guarantee? I assume so, since you asked at all, but wanted to make sure.

If so, filing will take care of it.

If you did NOT have a personal guarantee, then the lease cannot be collected from you anyway, in most but not all cases. Some of this depends on how the business was structured and how it was transferred.

Yeah I personally signed the lease. I was dumb and had no idea that I would be liable for anything beyond the business itself since my business partner told me they can just take the business. I should have consulted someone who knew about business. The lease doesn't mention he can sue to take my house or assets, but I know he can now. My dad has a business where the lease specifically put the house as an asset that the lease is secured against, but my lease said the businesses and all of it's assets are held as security. I am thinking that doesn't mean it is limited there.

You wouldn't happen to know from experience if courts look at income around 60k as something they would only do chapter 13 with? Or if it is better if I had a leased vehicle and other expenses that would help shelter future income. I don't want to have to file, or have my job at risk. The bk lawyers don't really have definite answers, but if I won't file for a couple years it would be nice to position myself better to ensure ch7 is what I would qualify for.

[nerves]

I don't know all the ins and outs but from my understanding, if more than 50% of your debt is due to business, you will automatically pass the means test for a 7. There are probably some "exceptions" in the guidelines but something for you to research. Good luck to you.

[geoffois]

Thank you Nerves

I don't know all the ins and outs but from my understanding, if more than 50% of your debt is due to business, you will automatically pass the means test for a 7. There are probably some "exceptions" in the guidelines but something for you to research. Good luck to you.

I was thinking that same thing. It's hard for a lawyer to probably say that outright when giving a free consultation. Do you know if they ad up the liability of the lease over the years that are still remaining and that is the amount I would be filing against? For example $450k till the end of the lease are what it ads up to be.