Legal Question in Credit and Debt Law in California

Breaking Lease

I signed a 48 month lease agreement for software that allows me to accept credit card payments. The leasing companay is in California and my business is registered in LA. Due to poor sales I decided to discontiue this method of receiving payment so I returned the software. The contract says that I must pay the remainder of the software lease which amounts to about $650.

Lease payments were made by direct transfer from my checking account so I placed a stop paynment on any further charges from the leasing company. What are my risks? Can the leasing company put a lien on my checking account? If so can I just close it and open a new one to avoid this result? How bad will my credit rating suffer? My record is not flawed otherwise.


Asked on 3/05/02, 10:10 am

2 Answers from Attorneys
Ken Koury Kenneth P. Koury, Esq.

Re: Breaking Lease

Yes, you can close the account and open up a new one. the only way they can collect is file a lawsuit.

Read more
Answered on 3/05/02, 11:12 am
Ken Koenen Koenen & Tokunaga, P.C.

Re: Breaking Lease

What they will probably do is turn the matter over to a collection agency, who in turn will start contacting you for payment. If you do not pay, they can, and probably will, file a report with credit reporting companies as a collection account, and will be within their rights to do so.

You may want to call them and settle for a smaller amount, since they might be happier to get 1/2 now rather than 100% minus 40% to the collection agency later.

Read more
Answered on 3/05/02, 1:24 pm


Related Questions & Answers

More Credit, Debt and Collections Law questions and answers in California