When you are self-employed, it can seem like there are always new bills and expenses popping up that can take a toll on your business. Taxes, insurance, and other expenses can cause a lot of frustration and financial stress.
Though all situations are different, most self-employed individuals are eligible to file for bankruptcy. In order to file Chapter 13 bankruptcy, you will need to submit more documentation when filing than someone who is not self-employed.
Self-Employed Income and Expenses
Chapter 13 bankruptcy works best when your income and expenses are steady because you will be required to form a payment plan for your creditors and must meet all the requirements of the bankruptcy code. When you file Chapter 13 bankruptcy, you will be assigned a trustee to verify all of your information and ensure that you are contributing all of your disposable income into the plan.
Your creditors will be notified of your repayment plan and have the opportunity to review it. After the review, they can make objections if they feel that you are not contributing all of your disposable income.
When you are an employee with a steady income, you can gauge your monthly income and expenses and determine how much disposable income you have. When you are self-employed, your income and expenses can vary month to month based on the economy, season, and other factors that are out of your control.
Five Tips for Filing Bankruptcy When You Are Self-Employed
- Before filing, make sure your business and personal finances are completely separate. Always keep track of your business expenses and income while keeping your personal finances in order.
- Hire an accountant to calculate what your monthly income in before filing bankruptcy. It is important that you do not understate your income when filing bankruptcy as this can lead to a dismissal of your case.
- Gather all of your business expense documents such as contracts and agreements. If there is any outstanding debt, all of the debts must be included in the bankruptcy filing if you would like them to be considered for bankruptcy discharge.
- If you are considering bankruptcy as a possible solution to your financial troubles, do not transfer any assets to associates, family members, or friends. The transfer of assets can cause major problems and delays with your bankruptcy.
- Many bankruptcy attorneys offer free consultations. Schedule an appointment and meet with a qualified bankruptcy attorney to learn about all of your options for financial relief.
An Experienced Bankruptcy Attorney Can Help
When you are self-employed, filing bankruptcy can be much more expensive and complicated than those who work as a salaried or hourly employee for a company. Batesky Law Office has nearly 30 years of experience helping those who have found themselves in financial stress. We understand that life happens, and some expenses can be out of your control. We will help you determine the best path for gaining a healthy financial future.