Can I setup a LLC and apply for a business loan if I’m in Chapter 13?
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Can I setup a LLC and apply for a business loan if I’m in Chapter 13?
I have an opportunity to start business but it requires me taking out a business loan. Besides
actually being able to obtain financing, can I legally enter into a business loan if I’m personally
in bankruptcy?
Asked on September 4, 2018 under Business Law, Kansas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
Legally, yes--you can take out or enter into a loan while in bankruptcy: the bankruptcy applies to debts, obligations, etc. taken out pre-bankruptcy filing, but you may legally enter into new ones after filing. You can also legally create/register an LLC.
Whether a lender will lend to you if you are in bankruptcy and so have shown you are not a good credit risk is a different story--lenders are not obligated to lend to you, so you may have difficulty getting a loan.
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