Legal Question in Bankruptcy in California

I signed a franchise agreement that has 6 more years till it expires. If my business folds (I think it may in a couple months) my franchise says I am going to owe them the max amount of royalties for the 6 years so around 43,000 total. I do not own a house or car. I have no money or I would still have my business. So my question is if I declare bankruptcy can I break free of that debt. I don't mind paying in a chapter 13 or 11 payments towards what I owe but I can't figure out how I will be able to pay the full amount. Does bankruptcy cover franchise obligations or is it exempt like school tuition? Also will it break my lease for my building as well or am I still obligated to pay that too? I am determined to do my due diligence but trying to figure out what that is given my situation.


Asked on 10/21/13, 11:10 am

1 Answer from Attorneys

Scott Jordan Jordan Law Office

You should be discussing these matters with a bankruptcy attorney now and planning for the time when bankruptcy may be necessary. If you qualify for a Chapter 7 bankruptcy, the franchise obligation and lease can be discharged, along with other debts. As for school tuition, it depends on whether the debt is owed to the school itself or whether you obtained student loans to pay the tuition. The former is dischargeable and the later is not.

I would be happy to consult with you. Please feel free to call me at your earliest convenience at (925) 362-1725.

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Answered on 10/21/13, 11:46 am


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