Even though the economy is slowly recovering from the recession, a few years ago, many people who were unable to find gainful employment decided to build new businesses. With the right planning and business savvy, starting a new business venture during an economic dip can be quite lucrative, but success is never guaranteed. In the cases where businesses don’t take off, many people consider bankruptcy as a viable option.
Considering Bankruptcy As a Business Owner
Whether you are considering bankruptcy as a business owner or if you are self employed, personal bankruptcy is probably the way to go. The personal bankruptcy process as a business owner is quite similar to filing as a non-entrepreneur.
The only major difference is that you will not need your pay stubs for payment history or the W-2 forms. Instead, you will need to provide the courts with documents that outline your business’ earning reports, losses, and proof of income.
What To Do
Many people believe that if they are self-employed or if they are small business owners, they would be unable to successfully file for bankruptcy of any kind. The truth is that you can file for bankruptcy, but you will need to contract the services of a professional bankruptcy attorney. The reason for this is because the documentation needed will be a lot more complex and an attorney can provide you with a better idea of whether you qualify for bankruptcy.
Rule Number 1
The most important thing you need to know in these cases is that you are completely honest and that you provide your attorney with financial details and proof of income. A CPA (Certified Public Accountant) or a bankruptcy attorney should verify the documents you will need to provide. The documents required are:
1) Bank statements
2) Profit and loss reports
3) Earnings and expense documents (receipts and bills)
Business owners can file for personal bankruptcy, but will need to get the professional legal help to ensure that their business is protected.