Restaurant Bankruptcy: When Your Lease Guarantee Follows You Home

Signed a personal guarantee on your restaurant lease or equipment? That debt can survive even after the restaurant closes. Chapter 7, 11, and Subchapter V for Florida restaurant owners. Free consultation.

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Restaurant Bankruptcy · Personal Guarantees · Free Consultation

When Your Lease Guarantee Follows You Home

Running a restaurant almost always means signing your name personally—on the lease, on the equipment financing, sometimes on both. When the margins get too thin, that personal guarantee is what determines whether closing the restaurant actually ends the debt, or just moves it into your personal life.

Why So Many Independent Restaurants Are Struggling Right Now

Restaurant menu prices have risen roughly 6% since early 2024, while grocery prices have only risen about 3% over the same stretch—a gap that’s quietly pushing diners toward cooking at home and squeezing already-thin restaurant margins even further. Florida’s restaurant industry as a whole runs on a margin of well under 6%, and new restaurants close at a rate above one in five.

Florida’s restaurant scene is also deeply Hispanic—Latino-owned restaurants make up roughly 28% of the entire industry statewide, employing well over 100,000 people. If that’s your restaurant, none of this is a reflection of how hard you’ve worked. It’s the math the whole industry is fighting right now.

Situations We See Often

You’re Behind on Commercial Rent

Lease arrears can pile up fast, and most commercial leases hold the owner personally liable through the lease guarantee, not just the business entity.

Equipment Financing or a Merchant Cash Advance

Kitchen equipment loans and merchant cash advances are almost always personally guaranteed, and MCAs in particular can escalate fast when payments are missed.

You Already Closed the Restaurant

Closing the LLC doesn’t end a personal guarantee—the landlord or lender can still come after you individually for what’s left on the lease or loan.

The Restaurant Is Worth Saving

Good food, real customers, but debt from a rough stretch—payroll, a bad lease term, a slow season—that needs to be restructured before it takes the whole business down.

Your Options, Depending on Where You’re At

If you’re…	This usually fits	What it does
Closing for good, want the personal debt gone	Chapter 7	Eliminates personally guaranteed lease and equipment debt, typically within 3–5 months
Want to keep the restaurant open, debt under the small-business threshold	Subchapter V	Restructure and keep operating, no creditors’ committee, plan due in 90 days
Multiple locations, or personal exposure too high for Chapter 13	Chapter 11	Full reorganization, no debt ceiling, more complex and costly

Want the full picture on any of these? Read our guides to Chapter 7, Subchapter V, or Chapter 11.

Where Your Case Gets Filed

We file in the U.S. Bankruptcy Court for the Middle District of Florida—the Orlando Division for most Central Florida restaurant owners, the Tampa Division for Polk County. It’s the only federal district we practice in, and today nearly all hearings are held remotely by video.

Latino-owned restaurants make up more than a quarter of Florida’s entire restaurant industry. Attorney Juan Burgos was born in Venezuela and represents clients directly in English, Spanish, and Portuguese—no interpreters, no runaround.

Frequently Asked Questions

I closed my restaurant already. Am I still on the hook for the lease?+

Usually, yes—if you signed a personal guarantee on the lease. Closing the LLC ends the business, but a personal guarantee is a separate obligation that belongs to you individually. The landlord can generally still pursue you for the remaining lease balance unless the guarantee itself is addressed, most often through bankruptcy.

What about a merchant cash advance specifically?+

MCAs are typically structured with personal guarantees and can be aggressive about collection once payments are missed. They’re one of the most common triggers we see for restaurant owners coming in for a consultation—bring the agreement and we’ll walk through your actual options.

Can I keep my house and personal savings?+

In the large majority of cases, yes. Florida’s homestead exemption is one of the strongest in the country, and retirement accounts are fully protected under federal law. We’ll go through exactly what’s protected in your situation during the consultation.

Do I need to be a U.S. citizen to file?+

No. Florida residency and meeting the income requirements are what matter, not immigration status.

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By Juan C. Burgos, Esq. — Florida Bar No. 84056. This page is for general educational purposes and does not create an attorney-client relationship or substitute for individual legal advice. Every situation is different. Juan Burgos Law is a debt relief agency under federal law.