QUESTION

What are the options for my 21-year old daughter who had to break a business lease on shop that she was forced to close.

Asked on Apr 19th, 2018 on Business Law - North Carolina
More details to this question:
Due to unsustained cash flow, my daughter had to close her business and break the lease on the shop she was using. Now the shop landlord is begun the process of suing my daughter for the balance of the lease agreement ($21,000.00). This of course is money that my daughter does not have. What are her options at this point. She has received several threatening letters from the lawyer firm representing the landlord. My daughter resides in Charlotte, NC. Thank you.
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1 ANSWER

Appellate Practice Attorney serving New York, NY
You say it was a business lease,  Was your daughter the tenant, or was it a business entity she had created (i.e. a corporation or llc).  If the latter, and assuming that your daughter operated the entity properly, your daughter is not personally liable unless she personally guaranteed the obligations under the lease.  Also, depending on the jurisdiction (I don't know what the law is in NC), your daugher may not be liable for the entire unpaid rent, but only for the difference between the rent due under her lease and the amount the landlord is able to rent the space for now.   Assuming that your daughter is personally obligated  for the lease, you may still be able to reach a settlement with the landlord.  Since yur daughter is unable to pay her obligations, she may be eligible to have the debt discharged in bankruptcy.  While this is a last resort, it would also be bad for the landlord, who may accept less than the full amount to avoid it, particularly if that amount is offered by someone who is not legally obligated to pay it, i.e. a friend or family member of your daughter.
Answered on Apr 20th, 2018 at 10:02 AM

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