In a Chapter 7 bankruptcy, your assets (other than your exempt assets) are gathered together and sold. Any unsecured debt that isn't paid off from the sale proceeds is discharged, giving the debtor a debt-free fresh start.
Nothing prohibits you from starting a new business after filing for bankruptcy. But obtaining credit will be a problem if you start the new business soon thereafter. And, if you closed a similar business shortly before opening the new one, you might run into problems.
What Not to Do Before Bankruptcy
“Fresh Start” refers to the legal and bankruptcy filing process, which is designed to help individuals who are unable to repay their creditors. An individual may choose to file bankruptcy to get a “fresh start,” and liquidate assets or create a viable repayment plan to repay creditors.
an opportunity to begin something again: Ramirez is looking forward to a fresh start with his new team.
Any post-bankruptcy earnings are completely exempt in a Chapter 7 filing. Welfare benefits and retirement accounts are almost always protected-- but only if you list them on your paperwork. Social Security, unemployment benefits, 401(k), disability benefits, veteran benefits, etc., are all protected by federal law.
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