If I have a commercial lease collection debt of 188k but I went out of business on, and cannot pay what are my options?
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If I have a commercial lease collection debt of 188k but I went out of business on, and cannot pay what are my options?
I had a business, in which the lease had been 10 years, and I went out of business 5 years ago 3 years into the lease. There had been a judgement of $2000 (which had been satisfied by writ of execution. Now there is still a collection account from the landlord which a collection agency has been working. I had tried to negotiate and propose a new lease agreement. The landlord did not respond with either my email nor the certified letter I sent. To this day I still have a $188,000 collection, I don’t have the means to pay even a portion of that amount, what are my options?
Asked on January 17, 2012 under Bankruptcy Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Assuming that it is a valid debt (that is, that you do not dispute the amount, or even that you owe it at all), then if the other side will not negotiate, your options are:
1) If the debt had been incurred by a corporation or LLC (not by you personally, or by you doing business as a sole proprietorship) and you did not personally guaranty the debt, then you should be able to simply ignore the debt if the business is not a going concern--if the debtor is a corporation or LLC, the creditor can only proceed against the corporation or LLC.
2) If you personally owe the money (e.g. it was a sole proprietorship, or you personally guaranteed the lease), then you may need to consider bankruptcy as an option.
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