How to restart a business after going broke

Starting over after going broke has two parts: the practical one (debts, credit record, documents) and the other one, which weighs more (shame, fear, trust). Both are better resolved in the right order: first close what ended with dignity, then learn from it, only then open again. Whoever skips steps tends to repeat the same mistakes with new money.

The practical path

1. Close what ended, properly. With an accountant, organize the closure or suspension of the old company, the debts and the situation with employees. Open issues follow the next business around.
2. Know what the law provides. The reform of the Bankruptcy Law (Law 14,112/2020, which amended Law 11,101/2005) created a faster path to a fresh start: a bankrupt debtor's obligations can be extinguished, among other cases, once three years have passed since bankruptcy was declared, or when, after all assets have been sold, more than 25% of the unsecured debts have been paid (Law 11,101/2005, art. 158, II and V). Until that extinction, the bankrupt debtor is barred from running a business (art. 102). A lawyer will tell you whether and how this applies to your case.
3. Take stock of the causes. Why did it go under? Price, cash, a partner, the market, timing, management? Write it down honestly, without sparing yourself and without condemning yourself. That document is worth more than any course.
4. Take stock of what remained. Skills, customers who trust you, suppliers you were fair with, knowledge of the industry. That's capital, even without money.
5. Start again smaller. One service, one product, one customer. Lower fixed costs, no expensive debt, planned runway. Size comes back later.
6. Choose better with whom. If the problem involved partners or associates, the next business starts with a written agreement.
7. Take care of your mind. Shame and fear are normal and pass faster when shared. If the pain turns into despair, CVV answers for free, 24 hours a day, at 188.

This page is general guidance, not a legal opinion. Without money for a lawyer, go to the Public Defender's Office or a law school's legal aid clinic.

How Bairo went through it

Bairo Leandro Gonzalez Martinez says he has started over more times than he can count. After losing the business to his partners, he went to work in events and digital printing. After going broke following an investment that didn't hold, with many people depending on him, he decided to do something he didn't know how to do. The next attempt went wrong: the very people he had helped left him hanging. He kept going.

His story takes an inventory that serves as an example: the course left method; the idea that came too early left an eye for the future; the cosmetics left proof that he could create from nothing; the partners left the lesson about whom to build with; going broke left the courage to do what he didn't know how to do. The seventh attempt, he says, carried all the others inside it.

The Method step

This is the page for step 7 of the Seventh Attempt Method: go quiet and return to the circle. Twenty minutes without screens, just paper. Then, for every attempt you've made, write down what it left. Your next attempt begins with that list in hand.

Discover the Seventh Attempt Method

Read also

• Can I open another company with a bad credit record?
• What to do when you've gone broke?
• Fifty lives
• The seventh attempt