Starting a New Business After Bankruptcy | Milwaukee, WI

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Home 9 Starting a New Business After Bankruptcy in Milwaukee

Want to start a business after bankruptcy? Plan and strategize your next move!

Have you ever thought about starting a new business after bankruptcy in Milwaukee? It may seem daunting, but with a carefully laid out plan and the right approach, it’s entirely achievable. Despite past bankruptcy, there are no legal restrictions that bar you from launching a new business. However, you will need to account for some unique considerations when developing your business under the shadow of a previous bankruptcy.

Bankruptcy is a common fear among business owners and entrepreneurs, even more so during times of upheaval, like the 2008 financial crisis or the COVID-19 pandemic. Filing for bankruptcy does not mean your entrepreneurial dreams of starting or maintaining a business are out of reach. It just means there might be more financial difficulty and a few obstacles to consider.

It is not necessary to get a lawyer to start a new business after bankruptcy, but it can be helpful to seek professional advice. A bankruptcy attorney or financial advisor can help you navigate the process and ensure that you’re on the right track. Starting a new business after bankruptcy can be complicated, so it’s a good idea to seek professional advice.

To help you plan a good start on your business after bankruptcy, consult with one of our bankruptcy attorneys at Miller & Miller Law LLC. Our attorneys utilize experience, practice area knowledge and innovative technology to help strategize  your business plans quickly, efficiently and with great accuracy. Schedule a free case evaluation with us now!

Can I Keep My New Business Separate From Myself?

Starting a new business is an exciting endeavor, but it’s natural to wonder if you can keep it separate from yourself. Many entrepreneurs seek to establish a clear boundary between their personal and business lives, and doing so has its advantages. Here are some key considerations to help you understand how you can maintain a clear distinction between yourself and your new business:

  • Choose the Right Business Structure: One of the fundamental steps in keeping your business separate from yourself is selecting the appropriate business structure. Options such as a limited liability company (LLC) or a corporation can provide legal protection by separating your personal assets from business liabilities. This shields your personal finances in case your business faces legal issues or debt.
  • Maintain Separate Bank Accounts: It’s crucial to establish distinct bank accounts for your business and personal finances. Mixing personal and business funds can create accounting headaches and may even lead to legal complications. By maintaining separate accounts, you can easily track business expenses, profits, and losses.
  • Document Everything: To strengthen the separation between yourself and your business, document all transactions and agreements. Keep records of contracts, invoices, receipts, and any other relevant paperwork. Proper documentation can help demonstrate that your business is a separate legal entity.
  • Avoid Personal Guarantees: When signing contracts or obtaining loans for your business, avoid providing personal guarantees whenever possible. A personal guarantee means you are personally liable for the business debt if the business cannot repay it. Limiting personal guarantees can further protect your personal assets.
  • Set Boundaries and Maintain Professionalism: Clearly define boundaries between your personal life and business activities. Avoid mixing personal matters with business affairs and vice versa. Maintain professionalism in all business interactions to reinforce the distinction between you and your business entity.
  • Keep Proper Accounting Records: Implement a solid accounting system to track all financial activities of your business accurately. This will not only help with tax compliance but also support the separation of your business from your personal finances.
  • Avoid Communal Assets: Refrain from using personal assets for your business unless properly documented and agreed upon. For example, using your personal car for business purposes might blur the lines between you and your business.
  • Consult with Professionals: Seek advice from legal and financial professionals who can guide you through the process of keeping your business separate from yourself. An experienced bankruptcy attorney or accountant can ensure that you’re adhering to all legal requirements and best practices.

Remember that maintaining a clear separation between yourself and your business is essential for legal protection and financial security. By implementing the right strategies and seeking professional guidance, you can successfully navigate the path of entrepreneurship while safeguarding your personal interests.

Ready to launch your new business? Take the first step towards success by consulting with our bankruptcy attorneys today! Call us now to schedule a free case evaluation.

Can I Start a Similar Business to the One That I Previously Closed Due to Bankruptcy?

Starting a new business that closely resembles a previously closed business, especially after going through bankruptcy, may not be a wise decision. When a company faces financial difficulties and accumulating debts, it may seem appealing to shut it down and then start a fresh business under different circumstances.

However, this approach can lead to unforeseen challenges and potential legal issues. Here are some reasons why pursuing such tactics may not yield the desired outcomes and might even be deemed counterproductive:

  • Ineligibility for Debt Discharge: Filing for Chapter 7 bankruptcy does not provide a means to discharge or eliminate debts entirely. The debts incurred by the previous business may continue to be liabilities for the individual starting the new business.
  • Creditor Collection Rights: Creditors from the former business may have the right to collect debts from the new business if it is perceived as essentially the same enterprise. This can create a cycle of debt and financial burden for the entrepreneur.
  • Fraudulent Actions: Engaging in maneuvers to evade paying creditors may be viewed as fraudulent behavior, potentially resulting in legal consequences and liabilities.
  • Limited Protection from Corporate Structures: Utilizing corporate structures like LLCs or corporations may not shield an individual from the consequences of fraudulent actions. Courts can disregard such business structures when fraudulent intent is evident.

If considering starting a new business that closely resembles the previous one, it is advisable to seek counsel from a knowledgeable business lawyer. Consulting with a legal professional will help assess the feasibility of the venture and ensure compliance with relevant laws and regulations.

On the other hand, pursuing a unique business venture minimizes the likelihood of encountering complications related to previous bankruptcy or debt obligations. For any business endeavor, it is essential to approach it with integrity, transparency, and a commitment to ethical practices.

Tips for Starting a Business After Bankruptcy

Starting a new business after bankruptcy might feel like a difficult task, but it’s important to remember that many successful entrepreneurs have faced similar circumstances and managed to build thriving ventures. Here are some valuable tips to guide you through the process of starting a business after bankruptcy:

  • Learn from Past Mistakes: Take the time to reflect on the reasons that led to the bankruptcy of your previous business. Identify the mistakes made and the lessons learned from that experience. Use these insights to develop a solid plan for your new venture and avoid repeating past errors.
  • Assess Financial Readiness: Before launching a new business, assess your financial readiness. Ensure that you have sufficient funds to cover startup costs and initial operational expenses. Consider creating a realistic budget to track your finances effectively.
  • Choose the Right Business Idea: Select a business idea that aligns with your skills, passions, and market demand. Conduct thorough market research to identify potential opportunities and competitors. A well-thought-out business idea increases your chances of success.
  • Craft a Comprehensive Business Plan: Develop a detailed business plan outlining your business goals, target market, marketing strategies, financial projections, and operational plans. A well-structured business plan not only helps you stay focused but also assists in obtaining financing if needed.
  • Rebuild Your Credit Score: After bankruptcy, rebuilding your credit is essential for securing loans or financing for your new business. Timely payments on personal debts, such as credit cards and loans, can help improve your credit score over time.
  • Overcoming Financing Challenges: Overcoming financing challenges after bankruptcy requires exploring alternative funding sources like bootstrapping, seeking investments from friends and family, and exploring grants and loans for individuals with past financial difficulties. Building a solid business plan with realistic financial projections will enhance your credibility when approaching potential investors or lenders.
  • Explore Vendor Financing: Negotiate with suppliers and vendors to secure trade credit or vendor financing arrangements. Some suppliers may be willing to extend credit terms, allowing you to pay for goods or services after delivery, which can improve your cash flow during the initial stages of the business.
  • Tax Considerations: Consult with a tax professional to understand the tax implications of starting a new business after bankruptcy. Be aware of your tax responsibilities, including income taxes, sales taxes, and payroll taxes. Understanding tax deductions and credits available to small businesses can help you optimize your tax situation and reduce tax liabilities.
  • Comply with Legal Requirements: Ensure that you fulfill all legal obligations to start a business in your area. Register your business, obtain necessary licenses and permits, and comply with local and federal regulations.
  • Network and Collaborate: Engage with local business communities and networking events to expand your connections. Networking can lead to valuable partnerships, collaborations, and potential customers.

Call our Bankruptcy Attorneys Today!

Remember that starting a new business after bankruptcy in Milwaukee may take time and effort, but it is possible to build a successful venture with the right approach and determination. Seek support from our  bankruptcy attorneys at Miller & Miller Law for a free case evaluation . We offer guidance based on our own extensive experiences and knowledge in the field of bankruptcy. We also offer legal services in Chapter 13 bankruptcy, Bankruptcy Alternatives, Tax Debt Resolution.

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