A business leases may not be a true lease but rather recharacterized as a secured purchase, giving you significant power over the creditor.
Business Asset Leases
With business leases you have the same options in bankruptcy as with consumer leases: to “assume” or “reject” the lease.
Distinguishing between a True Lease and a Secured Purchase
To determine whether a “lease” is actually a disguised secured purchase the bankruptcy court looks at the deal’s economic substance.
Leases Treated as Secured Purchases in Bankruptcy
A “lease” of furniture or other consumer goods may actually be a disguised purchase. If so, through “cramdown” you can pay much less on it.
Your Bankruptcy Options with Personal Property Leases
Leases of consumer goods–furniture, appliances, electronics–are like vehicle leases: you can “accept” or “reject” them.
Leave Your Rental through Chapter 13 Bankruptcy
Chapter 13 has advantages and potential disadvantages compared to Chapter 7–it’s more flexible but there’s a chance you’ll pay more.
Leave Your Rental through Chapter 7 Bankruptcy
Chapter 7 bankruptcy gives you serious advantages for getting out of a residential lease–advantages in money, time, and peace of mind.
What If I’m Too Far Behind on My Rent to Catch Up?
In a Chapter 13 “adjustment of debts” you have much more time to get current on your residential lease agreement than under Chapter 7.
Can I Stay on the Lease If I’m Behind on My Rent?
In a Chapter 7 “straight bankruptcy” you can usually “assume” your lease agreement. But you have to get current fast and keep current.
If I File Bankruptcy Can My Landlord Terminate My Residential Lease?
Your landlord CAN’T evict you for filing bankruptcy. A lease provision which allows for eviction upon bankruptcy filing is unenforceable.
Getting Out of Your Vehicle Lease under Chapter 13
Getting out of a vehicle lease by “rejecting” it in Chapter 13 isn’t quite as quick as in Chapter 7 but has about the same practical effect.
Getting Out of Your Vehicle Lease under Chapter 7
Vehicle leases are often not such a good deal. If you find out your isn’t, you can almost certainly “reject” that lease and pay no more.