We’ve discussed what happens if you are self-employed and file for bankruptcy, but for those who have filed for bankruptcy and are now considering starting a business, what obstacles can you face? At the Jones Law Firm, we know that once you file for bankruptcy, you will need to find ways to boost income or find a new job. While you may think starting your own business is out of reach, the reality is that you can start your own business sooner than you think.
Although there is no legal prohibition on starting your own business after filing for bankruptcy, obtaining credit to start may be more difficult.
The first step will be to obtain permission from the bankruptcy court and your trustee to obtain new debts to start the business. If you do not, the court can dismiss your bankruptcy case, leaving you in a financial strain.
Once you have been given court approval, you will then need to find a lender who will work with you. Be mindful though that your interest rates are likely to be high until your credit score improves.
While no law stops you from starting a business after filing for bankruptcy, it may not be the best decision to start a business immediately after filing. If you’ve filed and completed a Chapter 7 bankruptcy, you may find it easier to secure credit as opposed to if you have been in the midst of a Chapter 13 filing.
If you still wish to start a business following bankruptcy, consider a debt-free start, such as working out of your home, utilizing the resources you already have, or partnering with someone who can help you financially start the company.
In addition, you may consider becoming an independent contractor to get your name out into the market you wish to be part of while rebuilding your credit score and paying down debts that have not been discharged.
Going forward with your business after filing for bankruptcy will include unique challenges, especially if you’ve operated a business before. Be sure to:
Starting a business after filing for bankruptcy may be difficult, but not impossible. Having the right tools at your disposal and understanding the ways you can rebuild credit will become imperative to your success personally and professionally.
If you have questions about rebuilding credit, contact our Ohio bankruptcy attorney today.
If you have questions about your ability to start a business after filing for bankruptcy, contact The Jones Law Firm for a free consultation about how we can help you decide what is right for you. With our office located in Reynoldsburg, Ohio, The Jones Law Firm works with clients in and around Columbus and throughout central Ohio.