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Category: Bankruptcy Law
Satisfied Customers: 17248
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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I am going into the restaurant business. I need to know several

Customer Question

I am going into the restaurant business. I need to know several things. One, should I file for personal bankruptcy prior to starting this business? Two, should I incorporate, or have a partnership, and why? Three, if I file for personal bankruptcy, is there a waiting period before I can start the business?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 5 years ago.
Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on.

1. If you file a personal bankruptcy that would discharge your personal debts, however you will have a hard time obtaining financing or even leases under your persona name for your business.

2. You should incorporate preferably an LLC, for your small business, as your corp. would be immune from personal debts and obligations you may have, and vice versa.

3. If you file for bankruptcy, their is no waiting time to start, however, the Court may wonder how you have the income to start a business, and may believe that you have hid personal assets, to start the business.
Customer: replied 5 years ago.
I do not have the funds to start the business. I have very little capital, in the form of a 401k, that I will have to access in order to pay my property taxes in January. If I choose not to file for bankruptcy prior to starting the business, and I file after the business is underway, with the business be affected?
Expert:  WALLSTREETESQ replied 5 years ago.
I would not start the business first.

You would be better off, filing a personal bankruptcy, and then use your 401k money to start your business, if you start the business before, the court could take the assets of the restaurant.