What to do if business is down and we can’t pay the rent?

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What to do if business is down and we can’t pay the rent?

I’m partners with my brother in a new small dry cleaning business. We have not been able to build the business enough to continue paying the rent. If we can’t work anything out and have to file bankruptcy, will the landlord be able to place a lien on our homes? Would we have to file personal bankruptcy as well or could we quit claim our homes out of our names? We’re 8 months into a 2 year lease. We stopped paying rent last month.

Asked on July 10, 2012 under Real Estate Law, New Jersey

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you and your brother cannot afford to pay your landlord the rent for the premises that you occupy, I suggest that you have a face to face meeting with your landlord to discuss the situation and be upfront with him or her.

Perhpas the landlord will accomodate you with a payment plan. Another option is to see a bankruptcy attorney about a possible filing for re-organization of your business where the debts owed could be re-structured under a plan over a period of time that you can afford to make.


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