Have you filed Chapter 7 bankruptcy? Are you trying to get a new business off the ground? Well, this isn’t going to be an easy task. However, there’s light at the end of the tunnel. You just need to know the right steps and the right business merchant services provider that can help you with financing and other merchant services, e.g., high risk ACH processing. So, let’s move forward to know this.
Chapter 7 Bankruptcy & High Risk ACH Processing
The U.S. Bankruptcy Code offers 6 ways to get rid of your debt. Chapter 7 and Chapter 13 bankruptcy types are the most sought-after options among business owners. In fact, Chapter 7 bankruptcy is the simplest one: you can complete it within 3-6 months.
Chapter 7 bankruptcy speaks of the lack of means to repay one’s debt. So, the bankruptcy court will discharge most of the debt and give you a fresh start. If you’re a sole proprietorship owner, you can easily file a personal bankruptcy case under Chapter 7 bankruptcy. If you’re an owner of a partnership, limited liability company or corporation, you’ll need to file the bankruptcy petition.
Be aware that you may be required to apply for the court’s permission in case you need to obtain more capital to launch your new business. You’re not likely to get approved for taking on a significant amount (several thousands of dollars or more), so don’t expect this from the bankruptcy court.
The reason is that bankruptcy filing points to your being in need of help to manage your debt and credit. As for your credit history, Chapter 7 bankruptcy will remain there for 10 years. Thankfully, traditional merchant services providers aren’t the only option to try.
Just turn to a reputable alternative online lender or payment processor like First American Merchant to get the best help for your new business after Chapter 7 bankruptcy. FAM specializes in the high risk field and carries an A+ rating with the Better Business Bureau.
FAM offers the cheapest rates for high risk ACH processing and high risk business financing in the industry.
Starting After Bankruptcy
If you’ve decided to file for Chapter 7 bankruptcy, you can launch a new business without delay: just the day after the bankruptcy has been completed. Here’re several important points to bear in mind when filing for bankruptcy:
- Don’t consider a new business that requires lots of out-of-pocket expenses
- Have a solid business plan in place
- Turn to someone who has satisfactory credit so he/she can become a co-signer when applying for business funding
- Have the necessary permits for starting a new business
- Obtain inventory if you’re going to sell products
- Place ads for free with the help of, e.g., fliers and online bulletin boards
- If you’ve accumulated business debt as a sole proprietor or a partner in a failed partnership, go with a different form for your new business, e.g., a corporation or/and limited liability company.
To sum up, when turning a business around or starting a new business after Chapter 7 bankruptcy, there’s no need to rush. Work on taking the right steps to improve your credit and to secure a positive cash flow so you can run your business without debt.