How Chapter 13 Works for Self-Employed People

Chapter 13 is called a “wage-earner's plan,” which can lead people to mistakenly believe that it only applies to those getting a paycheck. But Chapter 13 is designed for those with regular income, whether that comes from being on someone's payroll or having a roster of clients. Whether you run your own business, work as a freelancer, or earn a living through the gig economy, steady income can qualify you for Chapter 13.

For self-employed filers, the process works the same as it would for a W-2 employee. Once your paperwork is filed, the court will issue an automatic stay, halting all collections efforts, including foreclosures and repossessions. You'll then be set up on a repayment plan, which will have you making monthly payments for a period of three to five years.

Special Considerations for Business Owners

If you're self-employed in Marietta, Sandy Springs, or elsewhere in Northwest Georgia, an important part of filing is proving your income. Since you can't submit pay stubs, you'll need to provide proof of income documentation like tax returns, bank statements, and business records for up to four years prior to filing. You'll also detail your recent monthly income on the bankruptcy paperwork.

The best thing about Chapter 13 is that you should be able to continue to run your business after filing. With Chapter 7, your business assets may be seized as part of the liquidation process, but that isn't the case with Chapter 13. You'll simply need to ensure you continue to earn enough income to make monthly plan payments in addition to your living expenses.

Contact Me to Take Action

The Atlanta area is teeming with hard-working self-employed professionals dealing with overwhelming debt. Chapter 13 bankruptcy can be a great way to take control of your finances so that you can focus on business.

The Craig Black Law Firm can help with your Chapter 13 filings, whether you're self-employed or on a company's payroll. If you're considering bankruptcy, contact me at 678-888-1778 or complete this contact form.