If you’re self-employed, the list of things you need to keep track of—including taxes, health insurance and the particulars of running your own business—can often be more difficult than anyone ever anticipated. Unfortunately, this includes bankruptcy. The court can have a difficult time differentiating what kind of assets you have—especially debating whether they’re business or personal—when you file for bankruptcy.
Are you declaring bankruptcy while you’re running a self-employed business? James R. Jones, Attorney at Law can help. Read on to learn more about self-employed bankruptcy in Montgomery County, TX and see what we can do for you.
What’s yours, and what belongs to your business? When you’re a self-employed person, whether it’s copywriting from home or running an Etsy empire, the line between what’s personal and business blurs due to the nature of self-employment. For example, if you’re filing Chapter 7 bankruptcy, you might have assets seized because they’re in the course of running your business—but you may not get the full amount for them.
Usually, bankruptcy prevents personal assets—such as your vehicle—from being seized if you file for bankruptcy. However, if you have three cars and a dedicated cupcake food truck, you should expect that the truck will be seized and sold toward paying off your debt.
Generally, the court will seize your business assets and use them to pay off your creditors, at least in part, depending on which type of business bankruptcy you file in Montgomery County, TX. If you’re running a small business, it’s crucial to delineate which assets are specifically part of the company (beads, for example, are the sole province of a jewelry-making business) as opposed to whatever you and your family buy for your own purposes.
Finally, income verification can get sticky when you’re a self-employed person. First of all, the Chapter 7 means test depends on your income over the last six months prior to filing. If you don’t meet the means test, you won’t qualify for Chapter 7, which is often considered a more favorable type of bankruptcy.
If you’re filing for Chapter 13 bankruptcy, your income will determine what kind of monthly amount you can pay your creditors. You may need to provide invoices, contracts, bank statements and even signed statements from clients or customers. It’s not an ideal situation, but it’s important to get the proper result from bankruptcy court.
Declaring bankruptcy in Montgomery County, TX while running a self-employed business? We can help!
No matter why you’re declaring bankruptcy, James R. Jones, Attorney at Law can help. Our office is adept at handling and litigating bankruptcy claims, even if you’re self-employed. You shouldn’t have to go through this alone, so make sure to call us for help. We have years of experience working with state and federal bankruptcy courts, and will do our best to make sure you get a fair outcome. Reach out to us today to learn more about what we can do for you.