A little over a year ago, my wife and I purchased a resale store in Texas to help our son. To do so, we had to sign as "guarantors" on the 5-year lease on the store. After about 14 months we had no choice but to cut our losses and close the store. We are trying to work out a settlement with the landlord. My wife and I have limited funds and are retired with our main income coming from two rental properties that we own. Those properties are in our name and the landlord should be aware that we own them as we had to provide all of our financial information prior to being granted the lease. We are willing to pay most of what we have left in our savings account but can not afford to sell one of the rental properties and lose that income. If we can't reach a settlement amount with the landlord that we can live with, we are wondering if declaring bankruptcy would be helpful to us. If so, is it too late to start that process - since we have already defaulted on the lease?
1 Answer from Attorneys
It is not too late to file bankruptcy.
However, before you do that, try this: Pick a number that you think is fair to pay the landlord for his damages (a settlement). Write him a letter (paper letter - put a date on it - keep a copy) and make the offer.
If he says "no," let him sue you.
One of the defenses to breach of contract is that the landlord has a duty to try to mitigate his damages by trying to re-lease the property to somebody else. Has he done this? Or is he just sitting on his rear end doing nothing?
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