Breaking an equipment lease

Asked about 3 years ago - 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)

  1. Jeffrey S Merrick

    Contributor Level 12

    2

    Lawyers agree

    Answered . 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
    http://www.jeffmerrick.com 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.

  2. Michael James Duffy

    Contributor Level 13

    2

    Lawyers agree

    Answered . 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.

    Regards,

    Michael J. Duffy, Esq.
    Duffy Law, LLC

    1-888-414-5773
    www.mduffylaw.com

    1500 Market Street
    12th Floor, East Tower
    Philadelphia, Pennsylvania 19102

    52 Berlin Rd.
    Suite 3000
    Cherry Hill, NJ 08034

    mduffy@mduffylaw.com

    Please note: The information provided here is for general informational purposes only and should not be construed... more
  3. Mayer Nazarian

    Contributor Level 10

    Answered . 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... more

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