Can I setup a LLC and apply for a business loan if I’m in Chapter 13?

UPDATED: Oct 1, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Oct 1, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption