Bankruptcy Blog

17 December 2013

Can I file bankruptcy if I am self-employed?


Filing bankruptcy is possible if you are self-employed.  In fact, the process and rules are the same for people who are self-employed versus those who work for a business or someone else.  The circumstance that may be more cumbersome, however, is proving your income for the previous six months. 

Recordkeeping is a lot of work, and many people do not keep documents orderly.  However, in order to file bankruptcy under Chapter 7 or Chapter 13, you must prove your income for the last six months.  So, you must get as many documents as possible together to prove the income.  Documents that are acceptable to prove your income include check stubs or copies of checks paid to you, signed receipts or statements from the payer for cash you received, bank statements that show deposits, invoices for your business, signed contracts for your business, and your tax returns if they include some or all of the last six months of income.  An inability to prove income will result in a bankruptcy case dismissal. 

Proof of income will be especially important in a Chapter 13 case, under which a plan is determined for a modified payment schedule.  Relationships with creditors are preserved under this type of bankruptcy filing, and that is important to continue to build your business.
 
Steven H. Phelps  

Steven H. Phelps

Mr. Phelps was admitted to the Texas State Bar in 1992. His early litigation practice was concentrated in the areas of business law, banking and financial services, real estate and labor law. Since 1995, Mr. Phelps enlarged his practice to include the areas of estate planning and title services and most importantly, personal bankruptcy.

Call Steven today to talk about your individual situation during a free consultation.

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