Bankruptcy for the Self Employed
The process of bankruptcy can be extremely difficult to face if you are already experiencing major financial stress. If you’re seeking some type of protection from your creditors as a small business owner the process for bankruptcy for self employed may also seem more complicated.
Whether you are choosing to file for Chapter 13 or Chapter 7 bankruptcy, it’s very important that you understand what your options are. A self-employed bankruptcy process can be even more complex and involve some of these top steps:
Like anyone earning an income, self-employed individuals will need to file bankruptcy for the debts that they are required to pay. Any employee that receives a W-2 wage statement often has a convenient record of their overall income. A self-employed individual may not have such a clean record of their income. During any type of filing, you’ll often need to present this W-2 form to verify six months of your income before your filing date. The six month income test determines whether you qualify for Chapter 13 or Chapter 7.
If you’re not regularly paid and the payments that you take in are not well documented, it can be much more difficult for your income to be calculated for any type of bankruptcy. The expenses for your business and the income that you allow might just be available in records that you created yourself.
This could require you to perform a complete audit of your tax returns, invoices, contracts, e-mails pertaining to finance and more. You may have to demonstrate all of the incoming payments and expenses through digital payment systems in cash apps too.
This could leave you having to work with an accountant or going through a wide range of business documents in order to present your income over six months with definitive proof. You may also be asked to value out some of the various assets that are owned by your business in the event that a creditor may want to seize or sell these items to repay some of your debts.
If you are considering the option for bankruptcy as a small business owner, it could be wise for you to see a professional accountant to start with. Accountants will be able to provide an objective eye in income verification. When you are considering bankruptcy, you can use a financial professional to get the helpful tips that you need to gather the required documents that are needed for your financial planning in the future. Accountants can go through your finances and make sure that there is discernible proof of your income as well as an organized flow for your income documents.
Seeing an accountant and then taking this information to a qualified bankruptcy attorney can make sure that you will be ready to start building your case for bankruptcy.
If you want to successfully discharge your debts through Chapter 13 or Chapter 7 bankruptcy, there’s a number of laws that restrict the business assets that you can transfer before your bankruptcy. There’s a series of preferential payments and transfer assets that can occur before you filed but you could put your business at risk if you transferred these assets incorrectly. Filing for Chapter 11 bankruptcy could be a wiser idea if the value of your business could make a difference with the bankruptcy filing. In some cases it could be wiser to dissolve your business rather than risk your own personal finance.
Under chapter 11 bankruptcy, it is possible to restructure debts for business affairs and assets. This can often be one of the most complicated forms of bankruptcy and it requires an ongoing investigation. Many large corporations often file for chapter 11 bankruptcy in order to continue their business operations. Individuals that have incurred a large amount of debt in order to manage their own business may qualify for this route. What is important to keep in mind with Chapter 11 bankruptcy is that it is not a fast process.
The process of filing for bankruptcy as a self-employed individual is often considered much more complicated than filing for bankruptcy if you earn a regular wage. Finding a bankruptcy lawyer could be an excellent way that you can deal with your business debts and consider all the options that are available to you. Working with a professional bankruptcy attorney can help you understand the best option for your own business and for protecting your finances over time.
If you are interested in seeking assistance with your self-employment bankruptcy, contact our experts today. We have professional bankruptcy attorneys that are standing by and ready to help with your self-employment bankruptcy case. We want to ensure you can access the assistance you need when it is needed most.
Contact us today and we can determine the best path for your bankruptcy needs as a self employed professional.