Rebuilding your business after bankruptcy discharge

Unlike the personal finance bankruptcy filings, business bankruptcy is a bit different. If you are planning to file business bankruptcy, you can have the opportunity to file bankruptcy under Chapter 11, which has especially been designed for the businesses. The businesses in general, file Chapter 11 so that the long term revenues can be higher than the liquidation value of the business assets. However, as bankruptcy has negative effect on your credit, Chapter 11 too is going to damage your business finance. So, what form of business opportunity can you have after discharge of the bankruptcy?


Business opportunity after bankruptcy

If you would like to restart your business after discharge of the bankruptcy, you will have to be aware of some facts. These are:
1. Lenders won’t agree to lend – Within the first six months of the discharge, none of the lenders are going to agree to lend you money in any form. It can really get tough for you to get any forms of new credit – mostly the unsecured ones – after bankruptcy. You will have to try and improve your credit in order to be able to get approved for loans and business credit cards. You need to check your credit reports to find out if the debts have been listed correctly under the bankruptcy. If this is not the case, you can try disputing these matters with the credit bureaus.

2. Interest rates charged will be higher – Even if you are able to qualify for a loan or a credit card or any such new credit, the interest rate charged will in general be higher. That is, the interest rates will be higher than what is actually charged by the creditors and lenders with regards to the business credit.

3. Try getting a co-signer – As it becomes tough for you to get any new credit after bankruptcy, even if you have a business, you can get a co-signer for yourself. This is going to help you in getting a new credit with good and affordable offers. The co-signer should be one who has a business and has good credit too with regards to his/her business. If you had a co-partner for your business, who were not required to file bankruptcy and has good credit, you can take his/her help too in order to get new credit.

4. Try securing any form of credit – The best way to improve your business credit after bankruptcy is to get hold of at least one credit account. If you can get a new account, you will be able to sue this for business purposes and make on-time payments against this. This is going to help you improve your business credit within some months or may be a year. So, try by all means to get a new credit that is going to help you in improving your business credit with time. Take a good care that you do not accumulate debt again.

5. Know the opportunities by US Small Business Administration – The US Small Business Administration or SBA offers different offers for the businesses who are trying to restart their business after a failure. Even if you don’t have a good business credit, you may be able to get some help from SBA as they provide good loan offers to such businesses. You will be required to talk to the financial institution with whom you will be applying for the business loan about the SBA offers.

So, here are the things that you need to know about and you need to do in order to create opportunities for yourself and your business after discharge from the bankruptcy.




Author Bio: Edward Baxter is a financial writer associated with fileyourbankruptcy.org. He writes on a wide range of personal finance topics.