What You Should Know About Being Self-Employed and Filing for Bankruptcy
Are you self-employed and considering the possibility of filing for personal bankruptcy in Illinois? Our experienced Oak Park bankruptcy lawyers know that you are likely to have many questions and concerns about the bankruptcy process, including your eligibility to seek bankruptcy protection without W-2s or more common ways of showing your average wages and general income. In short, self-employed people can be eligible to file for both Chapter 7 and Chapter 13 bankruptcy in Illinois, but there are some important things that you need to know.
Proving Your Self-Employment Income
Bankruptcy cases can be slightly more complicated for individuals who are self-employed because they do not have the same type of documentation concerning their regular income and the income they have earned in recent years. Under U.S. bankruptcy law, when a self-employed person wants to file for bankruptcy, they will need to ensure that they have sufficient information and documentation to prove their income.
Whether you run your own business as a sole proprietor or you are an independent contractor who does gig economy work, you should have records of your earnings that you will be able to supply with your bankruptcy petition and all required schedules. You will typically need to have evidence of your personal and business income and documentation from the past three years, including bank account information, contracts, invoices, receipts, and cash payments. You will also need to have records of your tax returns from at least the last two years. Even if you have been self-employed or working as an independent contractor, you should have tax returns that show your income and earnings. You may also have 1099s that can be relevant to your bankruptcy case.
Evidence of your earnings will be particularly important for a Chapter 13 bankruptcy case, which is commonly known as a wage earner’s plan and requires evidence of regular income.
Reporting Your Income
When you file for bankruptcy as a self-employed person or independent contractor, you will need to be sure that you report your income appropriately in the required bankruptcy schedules. Both your monthly income and your annual earnings will need to be reported. Then, if you are filing for Chapter 7 bankruptcy, you will typically use your earnings from the last six months to show that you pass the means test and are eligible for liquidation bankruptcy.
Creating Profit and Loss Statements
As a self-employed debtor, you will also likely need to supply profit and loss statements during your bankruptcy case. Your bankruptcy attorney can speak with you about accurately developing profit and loss statements and what the trustee will expect to see.
Contact Our Oak Park Bankruptcy Attorneys
Whether you are considering Chapter 7 or Chapter 13 bankruptcy as a self-employed person, an experienced Oak Park bankruptcy lawyer at our firm can provide you with assistance. We have years of experience representing consumers in a wide range of bankruptcy matters, and we can provide you with more information about bankruptcy for self-employed filers in addition to assessing your specific circumstances to discuss your eligibility for bankruptcy. Contact the Emerson Law Firm today to learn more about your bankruptcy options and to get started on your case.
See Related Blog Posts:
Chapter 13 Debt Limits Increase
Is Liquidation Bankruptcy Right for Me?
Proving Your Self-Employment Income
Bankruptcy cases can be slightly more complicated for individuals who are self-employed because they do not have the same type of documentation concerning their regular income and the income they have earned in recent years. Under U.S. bankruptcy law, when a self-employed person wants to file for bankruptcy, they will need to ensure that they have sufficient information and documentation to prove their income.
Whether you run your own business as a sole proprietor or you are an independent contractor who does gig economy work, you should have records of your earnings that you will be able to supply with your bankruptcy petition and all required schedules. You will typically need to have evidence of your personal and business income and documentation from the past three years, including bank account information, contracts, invoices, receipts, and cash payments. You will also need to have records of your tax returns from at least the last two years. Even if you have been self-employed or working as an independent contractor, you should have tax returns that show your income and earnings. You may also have 1099s that can be relevant to your bankruptcy case.
Evidence of your earnings will be particularly important for a Chapter 13 bankruptcy case, which is commonly known as a wage earner’s plan and requires evidence of regular income.
Reporting Your Income
When you file for bankruptcy as a self-employed person or independent contractor, you will need to be sure that you report your income appropriately in the required bankruptcy schedules. Both your monthly income and your annual earnings will need to be reported. Then, if you are filing for Chapter 7 bankruptcy, you will typically use your earnings from the last six months to show that you pass the means test and are eligible for liquidation bankruptcy.
Creating Profit and Loss Statements
As a self-employed debtor, you will also likely need to supply profit and loss statements during your bankruptcy case. Your bankruptcy attorney can speak with you about accurately developing profit and loss statements and what the trustee will expect to see.
Contact Our Oak Park Bankruptcy Attorneys
Whether you are considering Chapter 7 or Chapter 13 bankruptcy as a self-employed person, an experienced Oak Park bankruptcy lawyer at our firm can provide you with assistance. We have years of experience representing consumers in a wide range of bankruptcy matters, and we can provide you with more information about bankruptcy for self-employed filers in addition to assessing your specific circumstances to discuss your eligibility for bankruptcy. Contact the Emerson Law Firm today to learn more about your bankruptcy options and to get started on your case.
See Related Blog Posts:
Chapter 13 Debt Limits Increase
Is Liquidation Bankruptcy Right for Me?
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