Starting a Company After You File Bankruptcy

When you file bankruptcy, you position yourself for a fresh start financially. It will take time for you to build up time to obtain new loans and to secure new opportunities, but there may come a time when you want to start a company. If this happens, the good news is that you may still find it possible to do so even a few months to years after you file bankruptcy. Keep in mind that if your plans are to open a business, you should file bankruptcy with the aid of an attorney to ensure that you have the best possible opportunity.

Getting Your Business Started

For those who are planning to file bankruptcy, it is a good idea to consider the long term implications. Most lenders will not lend to you within the first six months to one year after you have filed. In addition to this, when you do qualify for a loan, it is likely to have a higher interest rate than you would have prior to filing bankruptcy or if you waited longer. Nevertheless, if you hope to start a company after you file bankruptcy, the following tips can help you.

• As soon as possible, secure credit in the business's name rather than your own. This can take some time to establish. However, once your business earns its own credit history, it will become easier to obtain loans.
• Consider a cosigner if you plan to start a business and are unable to secure funding. A cosigner, or business partner, with better credit may be able to obtain a loan with a lower interest rate, which will help the business to have a financial leg up over paying the higher interest charged to you.
• The US Small Business Administration does offer opportunities for those who wish to start a business who may not have good credit. The SBA is an excellent resource for loans like this. Those who have a bad or poor credit score may still qualify for these loans. Ask your financial institution if they offer SBA loans, too.

Getting Legal Aid

In some situations, it is best to turn to an attorney when you are facing difficulty starting a business after you file bankruptcy. In some situations, you may find it difficult to obtain loans or to secure property. An attorney can offer assistance and ensure that the business is properly established to protect it from your bad credit history.