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  1. #1
    Join Date
    Feb 2007
    Posts
    6

    Default Chapter 13 and leased business equipment

    Louisiana contractor considers filing chapter 13. Has leased equipment used to conduct business. Monthly debts are too much to maintain during slow period, but am current on all bank notes at this time. Also expect business too pick up in March/April.

    Can the lease company repo equipment, which would eliminate business income and shut it down. Can equipment be purchased at current market value over time of bankruptcy. Equipment was leased in October, right at start of holiday/winter slowdown. Company truck is over 2.5 years into loan, so market value is payed. I would think the same may apply to lease, but lease is too new.

    Maybe the best I can hope for is a payment delay for 60 days, then have to assume back payment and stay current on payments. The again is it unlikely a leasor will come 1200 miles to repo the equipment?

  2. #2
    Join Date
    Nov 2006
    Location
    Texas
    Posts
    354

    Default Re: Chapter 13 and leased business equipment

    Consult with a local bankruptcy attorney to see if Ch 13 or Ch 11 would be more appropriate for your business. Depending on your circumstances, you may assume or reject the leases......but you need more advice than you can expect from a free forum.

    BTW, the equipment owner won't necessarily have to drive 1200 miles to repo the equipment. They can contract a local repo man to do the job for them. If you are in arrears on the leases, but need the equipment to maintain your business, I suggest you call a lawyer ASAP for a free consultation....you may be racing the clock.

  3. #3
    Join Date
    Feb 2007
    Posts
    6

    Default Re: Chapter 13 and leased business equipment

    Fortunately, the company is current on all bills. It is a difficult question and I may have answered the question myself. Chapter 11 is an option, but it appears that for a small business it is expensive to administer the program.


    Thank you for the response.

  4. #4
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Chapter 13 and leased business equipment

    Check the lease agreement to see if it has provisions relating to what happens if the lessee goes bankrupt.

  5. #5
    Join Date
    Sep 2006
    Posts
    211

    Default Re: Chapter 13 and leased business equipment

    Quote Quoting Just Breath
    View Post
    BTW, the equipment owner won't necessarily have to drive 1200 miles to repo the equipment. They can contract a local repo man to do the job for them.
    Not to mention more and more repo companies are going national with offices/lots covering many states.

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