Legal

Leading Bankruptcy Attorney Explains What To Do If You Are Self-Employed

If you are self-employed, the chances are that you have time and again been forced to take major economic risks. Unfortunately, debts incurred during such processes can sometimes become overwhelming. If you have tried pulling yourself out of money problems in vain, you should consider seeking bankruptcy relief. The process of filing is challenging for self-employed individuals, and that is why you need a competent Philadelphia bankruptcy attorney in your corner.

There are factors you must consider before proceeding to file a petition. First, you need to provide proof of income for you to have a chance of being declared bankrupt. Usually, the courts will only need documents that accurately show your income for the past six months. Employees typically have the option of providing paystubs, although this will not be an option for you if you are an independent contractor or business owner.

It will not be enough for you to provide profit and loss statements or even financial records. The income verification requirement forces you to provide other supporting documents like tax returns, bank statements, invoices, check stubs, signed cash payment statements and contracts. A reliable attorney can help you prepare the documents needed to avoid needless frustration once you file a petition.

For self-employed individuals, it takes extra effort to verify their income with the courts. This can make the process of filing complicated, and it makes better sense not to work alone. Your income statements ought to be accurate because this is what the courts will use to establish your eligibility for Chapter 7. Unless you can pass a means test and demonstrate your inability to settle your debts with your creditors, the courts will be forced to turn you down.

With the harsh economic climate, bankruptcy lawyers are in high demand. Both employed and self-employed individuals are today finding themselves battling with insurmountable debts. By filing for bankruptcy, you get the tools you need to rebuild your finances and thrive.

Filing a petition should come as a last resort. Even with a chance to regain your financial footing, you must remember the effects this will have on your credit report. Knowing the early signs of debt issues will help you know when to exercise caution and protect yourself from the possibility of sinking into grave money problems.

One of the red flags that show you are headed for bankruptcy is falling behind on payments. If your unpaid debts are quickly stacking up, you need to work on a strategy before things go from bad to worse. The situation will only get worse once creditors start harassing you because you are unable to make the bare minimum debt repayment.

If your debts have not been settled for about three months and your credit cards are maxed out, this is a clear danger sign. You also have reason to grow weary if you do not have a contingency plan because of your inability to save. Irrespective of how dire your situation may seem, a bankruptcy attorney can offer you the much-needed guidance.