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Equipment lease..capital lease

Asked almost 4 years ago - Chicago, IL

I owe a business and leased equipment. The equipment had problems and company wants me to pay yearly maintenace fee, which I refused to pay,equipment is down and I have to send work out. The company that I got the lease thru has not been responding and I feel that I have been cheated. What I want to do is terminate this lease and return the equioment. It is a 5 yr lease and I have paid monthly lease for one and half year. I just want to get out of lease now and be done with it. They never told me how much was equipment worht, only monthly lease payment. When I signed the lease I asked if it required personal guarantte and was told no. Now i found out that I am personally liable. I have subchapter S corp.

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Attorney answers (2)

Mazyar Malek Hedayat

Reputation Level 12

Answered almost 4 years ago. Bankruptcy Attorney in Lockport, IL.

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We will need to speak with you in order to give you a more specific set of options, but in the meantime keep in mind that a leasing relationship is generally made up of 3 parties - you, the lessor, and the lease-financing company. Lease financing is quite lucrative because a financing agent can deny any responsibility for the underlying equipment. Their only job is to collect on a contract. The lessor is responsible for the condition of the goods. This leaves you in an unfortunate situation. The key to fighting your way out of such a merry-go-round will be to carefully review the lease documents, correspondence, and anything else related to your situation. If there is a way to attack this problem it will more than likely be in those documents.

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Dana Howard Shultz

Reputation Level 15

Answered over 2 years ago. Business Attorney in Oakland, CA.

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While more information would be required before an attorney can provide a definitive opinion, it probably is the case that:
- You are obligated to continue paying the finance company, no matter how serious the equipment problems are.
- Your only recourse is to go after the provider of the faulty equipment.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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