Glossary · People and paperwork
Personal bankruptcy
In short
This is a legal process where an individual seeks to eliminate or reorganize their debts. It significantly impacts your creditworthiness and ability to get an SBA loan.
What it means in a deal
A personal bankruptcy, especially a Chapter 7 discharge within the last 7-10 years, or an ongoing Chapter 13, can disqualify you from an SBA loan. The SBA requires good character and a strong credit history, so disclose any past bankruptcies upfront.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Personal bankruptcy
- What if I have declared personal bankruptcy in the past?
- How does a prior personal bankruptcy impact SBA 7(a) loan eligibility?
- How does having a past personal bankruptcy that has been discharged affect my eligibility?
- Can a past personal bankruptcy prevent me from getting an SBA 7(a) loan?
- How does a prior personal bankruptcy affect my eligibility for an SBA 7(a) loan?
- How does a prior personal bankruptcy, now discharged, impact my SBA 7(a) loan application?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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