Re-Starting Business After Bankruptcy

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Nobody wants to declare bankruptcy, but often the best course of action is to wipe the slate clean and start over. If you have already declared bankruptcy and are either waiting for your debts to be forgiven or if they have already been forgiven there is no need to sit idle. You started your own business and you are still the same entrepreneur[v3] . Bankruptcy may bruise your pride, but it can’t take away your business acumen, knowledge, and expertise. Most importantly, bankruptcy should never take away your drive. A business person can get started again in a “protected mode” so that you don’t find yourself in the same situation again. Here’s how.
When you file for bankruptcy, the court takes a snapshot of your assets and may liquidate all non-exempt assets to pay your creditors. This snapshot is the key to success going forward. Bankruptcy may be able to liquidate your assets at the time of the snapshot, but not your assets going forward. It is possible to help you restart your business in the safety of an irrevocable trust.
More specifically, Estate Street Partners specializes in using irrevocable trusts to separate your personal assets from your business assets and your old business debt from your new business profits. Using our methods, you can start fresh and use what you learned from your old business to be successful in your new one without the old business problems lingering to affect your new business success.
Irrevocable trusts are a way for you to work and grow your new business yet insulate it by not owning it. The UltraTrust® is a comprehensive trust document challenged and upheld in dozens of courts (including bankruptcy courts), to safeguard your new business. The irrevocable trust owns your business and is managed by an independent trustee. You can still manage your business, write checks, make business decisions and pay yourself if you choose, all within the safe confines of the trust. This insulates the business from you personally, so that you are free to take chances and grow your new business without putting your personal assets in jeopardy.
Not only does this arrangement protect your personal assets from lawsuits and other potential pitfalls within your business, it also protects your business from lawsuits levied against you personally. For example, if someone should fall on your property causing an injury, the party could sue you personally, but since you don’t own your new business, they have no standing to attempt to collect assets from the business.
If the plaintiff’s lawyer searches for your assets and determines that you don’t have enough to cover his litigation costs (because you don’t “own” the business). He may refuse to take the case on a contingency basis and ask that the plaintiff pay upfront. Having to pay upfront dramatically reduces the chances that you will be sued especially if the lawsuit is frivolous in nature. Additionally, it is possible to draft an UltraTrust® to separate your house, your bank accounts or any other asset you choose to further insulate one from the other in the event of frivolous litigation.
This configuration also insulates your business should it fall on hard times. With your new business in an UltraTrust®, if the economy should take another turn for the worse causing the business to fail, the business would file for bankruptcy, not you personally; even if you have personally guaranteed the loan.
How does this help you? The bankruptcy court could only liquidate assets within that particular trust, because the trust owns it, but does not own your personal assets. Basically you have compartmentalized your assets into different shoeboxes and anyone trying to collect can only collect from one shoebox while the rest of your shoeboxes are safe in the closet.
We haven’t even mentioned estate planning yet. With your new business starting in an UltraTrust® you qualify for Medicaid and you can avoid probate and estate taxes when you pass it on. How does that work? When the new business is in the trust, you do not own it.
This means that there are no assets in your personal name to probate, pay for the nursing home, or no estate in your name to tax. Since the trust has beneficiaries that you name when you set it up, such as your children, the assets go directly to them tax-free when you are ready to pass them on.
With Estate Street Partners and the UltraTrust® you can start your life over again. You can restart your business without having to worry about the old business and the old bankruptcy debt. You can protect that business from personal lawsuits and protect your personal assets from business bankruptcy and business lawsuits.
You can avoid probate and the estate tax when you pass your business to your children. You can discourage frivolous lawsuits even before they start. Estate Street Partners has the experience, knowledge and the tried and proven UltraTrust® trust documents to get you started again.
Category: Financial Planning

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