Legal Question in Business Law in California

I went out of business (sole proprietorship) and can no longer afford to make payments on equipment purchased under an equipment finance agreement (EFA). The business was in California but I believe the EFA is under the legal jurisdiction of Georgia. I want to turn-in the equipment that is the collateral for the EFA financing. The EFA does not appear on my personal credit report yet. If the equipment sells for what I owe (or I agree to make smaller payments to cover any shortfall) can the lender still put a negative entry in my personal credit report? Can the lender charge late fees and, if I discontinue the business insurance, insurance fees even though I'm cooperating to return the equipment? Is there anything else I can do to protect my credit?


Asked on 8/07/15, 11:48 am

1 Answer from Attorneys
Nicholas Spirtos Law Offices of Nicholas B. Spirtos

Work something out with the finance company and the seller. As long as you are making payments, they won't care and won't do anything to your credit. If the equipment is worth something, it can be sold to someone else, maybe for an amount sufficient to cover your obligation. You could also contact a bankruptcy attorney, but you mentioned you are trying to save your credit.

Read more
Answered on 8/08/15, 8:56 am


Related Questions & Answers

More Business Law questions and answers in California