If you are considering buying a franchise and getting a fresh start in life, there are some important financial decisions you need to make. If you are coming from a difficult or failing financial situation, you may want to explore your options for starting over. Bringing debts and liabilities from your previous endeavors with you into your new franchise business, may not be the best way start your new business. One way to get a new, clean and fresh financial start on life is to declare bankruptcy and wipe the slate clean.

There was a day when declaring bankruptcy was associated with being a failure. Nowadays bankruptcy is an accepted business strategy used frequently by some of America’s leading business people. There are a number of types of bankruptcy to choose from and each type generally deals with restructuring or discharging debts you have incurred but can no longer repay. Usually, a person will forfeit the underlying asset that was collateral for the loan in exchange for the debt being forgiven. In order to keep the underlying asset, the debt must be restructured with a new monthly payment over a greater number of years. Before you go rushing off to declare bankruptcy, be aware that there are certain debts that cannot be written off in bankruptcy.

If you were the subject of a judgment by a court whereby you agreed to make financial restitution to your victim, bankruptcy does not eliminate or modify these payments. This is also true if you received a DUI and are making payments to someone you have injured.

The second type of debt that is not subject to forgiveness in bankruptcy is student loans. If you have student loans from the federal government or other institutions, you are required to continue to make payments or have payments in arrears accrue regardless of your financial hardship. An exception is made in cases where you have become permanently disabled.

Child support and alimony payments are the third type of loan that does not go away in bankruptcy.

While filing for bankruptcy can help one to get a fresh start and rebuild their credit, not every type of loan qualifies. You should consult your accountant and franchise lawyer Mario L. Herman to see if restructuring your debt obligations will help you in your new franchise business.