Leasing an office building while in 13

[cwguy]

Hi all. I am 5 months into my 13 right now and was wondering if i can start a retail business. Of course this means i have to lease an building no more than 1000sqft. Will my bankruptcy prevent me from leasing? Also, the business capitial is from severyal family members so its not my money but gift money.

Thanks for your help

[despritfreya]

When my clients wish to start a business while in a 13 my suggestion to them is to first set up an LLC. The commercial lease should be in the name of the LLC with NO personal guarantees. Vendors should only be able to look to the LLC for payment. Utility companies should only be able to look to the LLC for payment (you get the picture). Remember, you personally cannot incur debt without court approval and a long term commercial lease can be quite a lot of debt not to mention post petition personal liability for any other business debt.

Once you become "self employed" you will have to begin filing monthly operating reports (P&L's). Your Trustee is not going to allow you to divert "disposable income" to help a start up business at the expense of your creditors. If the business is losing money and, as a result, you cannot afford the Plan payment your Chapter 13 will fail.

Des.