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I filed for ch 7 bankruptcy 2 years ago will I be able to start a sole proprietorship business in Ca?

Grover Beach, CA |

I have found it difficult to get bank accts and of course credit, will I be able to open a small business?

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Attorney answers 3


There is nothing in the bankruptcy code restricting you from operating a sole proprietorship after bankruptcy. In my opinion you can repair your credit to "good" standing after about three years of filing a chapter seven. After that three year mark you are more likely to get loans on good terms. Any credit you are going to be able to get for the business is dependent on your personal credit. I would suggest trying to build your personal credit rating as quickly as possible. The best way to do this is to get a credit card, use it every month, and pay off the balance before the end of the month. Credit bureaus want to see that you can manage credit effectively and this is the best to show that to them.


Yes. There is nothing legally preventing you from opening your own small business. Indeed, the whole point of bankruptcy is to give yourself a "fresh start".

As a practical matter, you may experience difficulty getting a traditional bank loan or line of credit. You should explore other options, such as private lenders and/or investors in your new business venture. But keep trying, and you will succeed!

The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author (who is only admitted to practice law in the State of California). For specific advice about your particular situation, consult your own attorney.


I agree with my colleagues, you are legally entitled to operate a sole proprietorship. Consider a business that does not require a large initial investment like a service business. Another option is to consider is an SBA loan.

Law Office of Michael J. Primus We are a debt relief agency and help people file for bankruptcy under the bankruptcy laws

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