Is it worse to have a judgement against you or file for bankruptcy?
We are a small business and the landlord has raised our cam fees 400% in the last 3 years with no justification. They are virtually putting us out of business, so with 24 months left, we want to break our lease and move. Is it better to file for bankruptcy and reopen in our new location with a new name. We are going to make an offer, but I am sure they will not accept it and try to sue us and get a judgement. Out of the 2 worse case scenarios, which is worse?
Posted August 3rd, 2010 in Bankruptcy Q And A. Tagged: 3 years, bankruptcy, case scenarios, judgement, justification, landlord, new location, small business, worse case.
As far as a judgement goes, even if they win the judgment, they cannot neccessarily collect it. Most judgements don’t get collected.
Have an attorney read your lease and see what it says in regards to raising your cam fees. does it say they can in the lease? if it is not in the lease, or not clearly stated in the lease, they may not be able to get a judgement anyway. also, if they don’t serve you before you move, they won’t know where your new business is. and if they don’t get your served for the judgment it gets thrown out due to lack of service. there are several options here, not just the two you mentioned.
I would not file bankrupcy for one judgment. bankrupcy is a last resort. I wouldn’t file bankrupcy for that one thing. they don’t have a judgment yet, they have to go through due process which means you have to be served once they file something, then you go to court and have an attorney present you side (if you do get served).
If you break your lease and move to a new location and change business names, you can do all that without filing bankrupcy anyway.
just make sure your mail forward is done to a PO box and not your new address. your landlord can find you through a mail forward if they are smart and really determined.
you never know, they may accept your offer, and also, have an attorney clarify your lease with you so you know what kind of a case you would have.
I might also mention, however, if they do decline your offer, serve you once they file something, and win the judgment. it is possible to get wage garnishment against you. and if you pay yourself, it is a possibility. but all of the above mentioned things won’t necessarily happen if you do your due diligence by having an attorney look at your lease to see if you have a leg to stand on.
One of the most successful businessmen I know, Joe, with Joe’s Bootshop and Country Junction in Muleshoe TX. moved his business cause the landlord kept raising the rent (because the landlord knew he was making a good living), so he up and moved 19 miles across the stateline, breaking his lease, and he did not file bankrupcy.
August 3rd, 2010 at 9:54 pmJudgments are worse.
August 3rd, 2010 at 9:54 pmBankruptcy protects you from civil suit; judgments can lead to more legal action.