Best Bankruptcy Lawyers in Johns Creek, GA

Determining income for people who get a regular paycheck is usually very easy. Pay stubs or bank statements clearly show what the debtor earned. But self-employed filers face some complexities, both in proving income, and protecting the value of their business. The Means Test and Income People filing for Chapter 7 bankruptcy have to show that they pass what is known as the means test. The means test sets a maximum amount that someone can earn in order to be allowed to file for bankruptcy. If you earn less than the median amount in your state, you can file, and if you earn more, you will have to itemize certain deductions to see if you can file for Chapter 7. But what does someone who is self employed actually make or earn? Often, showing this can be difficult, especially for smaller businesses where income, losses, profits and expenses can be commingled between business and personal or be irregular and sporadic. Documenting Income To document income to a bankruptcy trustee, you will have to prove a profit loss statement if you are self-employed. Remember that although a lot of profit may be good for your business for a multitude of reasons, when it comes to bankruptcy, the court will often consider profit to be the amount that you made or took home in salary. If this isn’t the case, you need to work with your accountant to more accurately classify expenses and earnings on your statement.