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Breaking an equipment lease

Portland, OR |

I have several medical equipment leases which cost me about $9000/mo. My business has been loosing money and I spoke with a bankruptcy attorney who informed me that the only way to get out of the leases was to file chapter 13. I tried to negotiate with the leasing companies and they weren't interested in this option. A different equipment company wants to lease me their equipment and told me that their attorney would have no problem getting me out of my current leases and warranty agreements. I have no interest in getting into another expensive lease which only looses me more money. Is there another option for getting out of a lease other than filing chapter 13, which I hope to avoid if possible.

Attorney Answers 3


Read the leases. What happens if you break the lease? What are the damages / penalty? If you want to continue to use the equipment, then you're going to have to pay. But if you are quitting business, then consider what would be the down-side of giving back the equipment.

Jeff Merrick, Oregon Trial Attorney
Injury & Employment Law 503-665-4234

The above is not legal advice. I cannot give you sound advice without knowing more information. It is intended to raise some issues for you to discuss with your own lawyer.

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There are almost always more than two options. Since you're considering Chapter 13,did you personally guaranteed the medical equipment? What are your intentions with the business - continue or not? Are you looking to cancel all of the leases? What's the lease term?

As my colleague noted, you should have an attorney review the terms of the leases. Base your action on what your options might be therein. Talk to the leasing company to see if more favorable rates can be obtained - they'll probably want to retain you as a customer when it's time or renewal. If direct negotiations fail, other actions might be considered, such as breaking the lease or bankruptcy options.

Not only it is unlikely that the other company's attorney can simply "get you out" of the other leases, interfering in a third party's contractual relationship like that can expose them to civil liability for tortuous interference with business relationships/contractual relations. They're either lying or have no idea what they're talking about.


Michael J. Duffy, Esq.
Duffy Law, LLC


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Please note: The information provided here is for general informational purposes only and should not be construed as legal advice or legal opinion on specific facts or circumstances. You should consult an experienced attorney concerning your particular factual situation and any specific legal questions you may have. No attorney-client relationship is created merely through the exchange of information via this web site. Michael J. Duffy will not undertake representation of a client without the client first signing a written retainer and representation agreement.

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1 comment

J Christopher Minor

J Christopher Minor


I agree that it is unlikely that the "new" leasing company can get you out of your present leases. However, since they assert that they can and will, you might consider signing up with the new company if they will agree to fully indemnify you against claims of the old company. However, don't try to do that yourself. Contracts are complex, and you would need the assistance of a lawyer. However, it is my guess that if you propose such an arrangement, the new company will exit the scene fairly quickly.


As the previous two attorneys noted, you have options. But to really know what those options are and what the best course of action would be, you need to understand your leases and the circumstances defined within them.

You would be well advised to consult with an attorney for an initial confidential assessment of your situation.

Good Luck.

Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.

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