A business leases may not be a true lease but rather recharacterized as a secured purchase, giving you significant power over the creditor.
With business leases you have the same options in bankruptcy as with consumer leases: to “assume” or “reject” the lease.
To determine whether a “lease” is actually a disguised secured purchase the bankruptcy court looks at the deal’s economic substance.
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.
Leases of consumer goods–furniture, appliances, electronics–are like vehicle leases: you can “accept” or “reject” them.
Chapter 13 has advantages and potential disadvantages compared to Chapter 7–it’s more flexible but there’s a chance you’ll pay more.
Chapter 7 bankruptcy gives you serious advantages for getting out of a residential lease–advantages in money, time, and peace of mind.
In a Chapter 13 “adjustment of debts” you have much more time to get current on your residential lease agreement than under Chapter 7.
Your landlord CAN’T evict you for filing bankruptcy. A lease provision which allows for eviction upon bankruptcy filing is unenforceable.
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.
An unexpired lease or executory contract gets special treatment in bankruptcy. You’ll likely get the option of “assuming” or rejecting it.
Unexpired leases and executory contracts can continue on after you file your bankruptcy case. What are they and what makes them special?
If you are not current on your leased vehicle but want to keep it, file a Chapter 13 case if you can’t bring the account current right away.