If you are your own boss, you already know that keeping track of your income and expenses is much different – and often more challenging – than when you work for an employer in Eugene. You may find yourself facing financial struggles and trying to decide if it is time to file for bankruptcy. If bankruptcy is the eventual outcome, it will be crucial to provide accurate details about how much you earn, as well as how much you spend, to the bankruptcy court. Failing to provide accurate information may delay your case or cause it to be rejected.
According to the Houston Chronicle, your income and expenses will determine whether you are eligible for Chapter 7 or Chapter 13 bankruptcy. Before you decide to file for bankruptcy, you will generally have a few months while you are weighing your options. During this time, it is important to keep track of the self-employment income you generate, as well as income from any other sources, such as a second job. A good rule of thumb is to keep income records for at least six months before your bankruptcy filing date.
Your expenses also play a significant role in your bankruptcy filing. Your monthly bills, including credit card payments, home mortgage and utility bills, should be considered. You will also need to determine your tax-deductible expenses with self-employment. These might include gas if you travel for work, computers, cellphone bills and a portion of your mortgage if you have a home office. It is vital to keep accurate records of your expenses, including receipts.
Finally, income is known to fluctuate with self-employment. You may have a relatively good month, while the next month generates little income. It is more important than ever to keep track of unstable income, which you may present to the court to help determine which bankruptcy type is most likely to fit your situation. Filing for bankruptcy is often a complex process. Therefore, this information should not be taken as legal advice.