Can I start a new business after I file for bankruptcy? 18 Answers as of July 11, 2013

I have a business idea but can't develop it if I have to continue working at my company and pay for all my loans. If I quit, file for chapter 7, and create an LLC or S-Corporation- will it is protected from my debtors?

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Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
Yes. File bankruptcy first. Get your discharge. Then start the new business. This is the safest way to protect your new business from your old creditors.
Answer Applies to: California
Replied: 7/19/2011
Burnham & Associates
Burnham & Associates | Stephanie K. Burnham
If you quality for Bankruptcy, after you file a Ch 7 Bankruptcy you will be able to open a business and have it free from the interests is your creditors. You will want to consult with an attorney to plan appropriately.
Answer Applies to: New Hampshire
Replied: 7/1/2011
Law Office of J. Scott Logan, LLC
Law Office of J. Scott Logan, LLC | John Scott Logan
It is protected from your creditors, but the ideas and property you now own may not be protected from a Chapter 7 Trustee.
Answer Applies to: Maine
Replied: 7/1/2011
Law Office of J. Thomas Black, P.C.
Law Office of J. Thomas Black, P.C. | J. Thomas Black
If you qualify to file for Chapter 7, and you file Chapter 7, all the money that you earn or property that you acquire after the filing of the bankruptcy is yours to keep. The only exception is that if you inherit property, or become entitled to money or property through a divorce settlement, a property settlement, or life insurance proceeds within 180 days of the date that you filed bankruptcy. So yes, there is nothing to prevent you from starting a business after filing a bankruptcy. It may be tough to find financing, but that is another story. However, if you can afford to pay your debts, I encourage you to do so. Bankruptcy, at least for consumers, is not intended to be a tool for "financial planning." If you are working and able to pay your debts now, you may not "pass the means test," that is, you may make too much money to qualify to file Chapter 7. Moreover, the court can consider the totality of your circumstances, and if you quit your job just to qualify to file bankruptcy, the Court could consider whether you filed your bankruptcy petition in bad faith, and if your receipt of a Chapter 7 discharge would be an abuse of the Bankruptcy Code. If it determined that your case was a bad faith or abusive filing, the Bankruptcy Court could deny you a discharge.
Answer Applies to: Texas
Replied: 7/1/2011
Ursula G. Barrios Law
Ursula G. Barrios Law | Guillermo Machado
After your bankruptcy is finished, you can do whatever you legally want.
Answer Applies to: California
Replied: 6/30/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    If you file bankruptcy, your debts will be discharged. If you start a new business after discharge, be sure not to take personal liability for any of the business debts, and sign as J. Doe, President, X Co., or whatever your title is.
    Answer Applies to: Virginia
    Replied: 6/30/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    I think you mean, "from your creditors." An "idea" has no real value unless you have something you sell. If you have something you can sell, you must disclose it as an asset. If you do not list it as an asset it will always be subject to your creditors claims.
    Answer Applies to: California
    Replied: 6/30/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Unless your business idea currently has value how financially successful you are post bankruptcy is irrelevant. Achieving a fresh start is the goal of bankruptcy.
    Answer Applies to: California
    Replied: 6/30/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    Generally as long as you waited until after you are discharged, yes your new company would be protected from any of the creditors that were discharged in your bankruptcy. Good luck in the new business endeavor.
    Answer Applies to: Michigan
    Replied: 6/30/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    Yes, you can start a business after filing bankruptcy. The purpose of bankruptcy is to give you a new start in life and a clear field for the future.
    Answer Applies to: Virginia
    Replied: 6/30/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Earnings after bankruptcy are what is called "property not of the estate." What this means is that it doesn't come into the bankruptcy.
    Answer Applies to: California
    Replied: 6/30/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    Any work or endeavor you undertake after you file is not part of the bankruptcy estate, so you keep it. The point of the bankruptcy is to get a fresh start so you can become financially productive again. Go make a killing!
    Answer Applies to: California
    Replied: 6/30/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    The idea of filing a bankruptcy is to get a fresh start. That purpose is effectuated by those who start new businesses after receiving their bankruptcy discharge. However, the timing of quitting your job and starting the new business may make a difference, so you need to consult with a bankruptcy attorney in your area to make sure you don't run into any problems.
    Answer Applies to: California
    Replied: 6/30/2011
    Mercado & Hartung, PLLC
    Mercado & Hartung, PLLC | Christopher J. Mercado
    You should be fine. The look back period for Bankruptcy is 6 months before filing with some exceptions.
    Answer Applies to: Washington
    Replied: 6/30/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    After your discharge, you are free to start a new venture so long as you have declared all assets, including developed intellectual property that you now have, in your bankruptcy.
    Answer Applies to: Indiana
    Replied: 6/30/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    You are free to do whatever you want after filing for Chapter 7 bankruptcy. Probably the primary reason for the personal bankruptcy laws is to free people from the oppressive chains of debt so that they can do productive things that benefits society. If you are successful in your business idea you will benefit everyone and will pay more taxes. Bankruptcy will allow you to do that. Good luck.
    Answer Applies to: California
    Replied: 6/30/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    Maybe, depending on the timing. Discuss this with your lawyer, and yes, a lawyer is critical.
    Answer Applies to: Georgia
    Replied: 7/11/2013
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