A self-employed person can file under Chapter 13 Bankruptcy, provided they have disposable income to fund a Chapter 13 plan, according to Lisle bankruptcy attorney. The only requirement in terms of income for a Chapter 13 is that the person has regular income from some source. Regular income can mean self-employment income, unemployment, wages, or social security, or disability payments, rental income or any other type of regular income. The mere fact that someone is self-employed does not prohibit or restrict that person from filing a Chapter 13.
The Chapter 13 trustee does have a series of documents that a self-employed individual must complete so that the trustee can get a better understanding of whether or not the amount being paid to the Chapter 13 trustee is fair and reasonable. When someone is working for wages, it’s very easy to see what they’re bringing in, what their deductions are in terms of their paycheck stub. When an individual is self-employed, there is so much leeway that that person has in terms of how often they work, what they spend on, and what they net, that the trustee wants to verify that everything is aboveboard and fair.
If you can complete the self-employed debtor application and get that past the scrutiny of the trustee, then you can get a case confirmed by being self-employed. More and more people today are becoming self-employed. As the job market crumbles, people feel they have to support themselves. And a lot of people are taking the entrepreneurial spirit of starting on their own. I have handled many, many cases where a self-employed debtor has been successful at Chapter 13.
Many circumstances occur where a self-employed debtor can budget better once they’re actually put through the Chapter 13 process and they have to analyze their income and expenses over a long time period. The only restriction to being a self-employed debtor is that you have to pass the scrutiny test from the Chapter 13 trustee. In my experience, this has not been very difficult to do, and self-employed debtors are regularly getting cases confirmed by the bank of two judges under Chapter 13 Bankruptcy law.