Filing for bankruptcy is a complex and often overwhelming experience. This major legal step to getting your finances in order takes a lot of time, much of which will be spent gathering important documents. If you own a business and need to file for bankruptcy, the process can be even more involved. You have to determine your income even if you are a business owner. This can take a long time, so you need to start right away. The following are some things to know about determining your self-employed income for your bankruptcy filing.
How Do You Verify Your Self-Employment Income?
One of the first things you will do for your bankruptcy is to verify your income. When you work for a company, you can ask the human resources department for income verification. Since you work for yourself, you likely do not have that option because that is part of having a W-2.
To verify your income, you will need to produce documents to figure out how much you were paid. This can include bank statements for your business, copies of any checks you paid yourself or proof of electronic transfers, and a copy of your business's tax returns.
You and your bankruptcy attorney can go over these documents and calculate how much money you made from your business. At that point, you can provide the verification to the bankruptcy trustee.
What If You Kept Poor Records?
As a business owner, it is vital that you maintain a variety of records in the event you need them. If you did not do that, your attorney will need extra time to dig through the information you can provide to figure out your income. If your trustee cannot verify your income, your bankruptcy may be dismissed.
From this point on, you need to begin maintaining your business records to avoid any problems in the future. You need to implement a filing system for not only your financial records, but also for your tax information, business licenses, and things of that nature. To better manage your finances, it is highly recommended that you outsource to an accountant. This way, you will easily be able to verify your income if you ever need to do so again.
If you own a business and need to file for personal bankruptcy, you need to begin working with a bankruptcy attorney right away. The process of verifying income can take a long time and adds extra time to the bankruptcy process. An attorney will know exactly what you need to verify your income as quickly as possible so you can move the process along.
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