Posted on June 8, 2009 at 3:22 am Which is the appropriate chapter to file for a self-employed man like me? Please advice. I'd appreciate it. I have been getting creditor calls and I'm seriously tired of them. So I threatened to file bankruptcy!

Posted on June 8, 2009 at 3:35 am Were they threatening you or your business? And you know sir, you don't have to file bankruptcy yet, do you keep a profit and loss statement? If you file for Chapter 7 you would have to pass what they call The Mean's Test. If your income is below what your state requires, then you'd be eligible for it. Chapter 7 will liquidate your whole business though...so you might want to speak with a professional financial counselor regarding this first. Why not fill out one of those forms and get a free assessment?Or why not hire an accountant?

Posted on June 8, 2009 at 4:08 am Also it is not easy to file bankruptcy on your own although you could. You may need the services of a bankruptcy lawyer for the intricate details of the case ( I hope your case is not going to be complicated) or a bankruptcy petition preparer for the numerous paper that you have to fill out. The first step for you really is to know how much you have and how much you owe and perhaps just sell your off some of your property and pay the creditors directly rather than file bankruptcy.

Posted on June 8, 2009 at 4:11 am Sir, since you have threatened your creditors with bankruptcy you have just placed yourself  in a very good position to negotiate your debt. You'd be surprised as to how much they'd want to work with you regarding the interest, penalties, and the actual amount of your debt...it is possible to lower those down without going through the complicated process of bankruptcy

Posted on June 8, 2009 at 4:28 am Supposing you are filing Chapter 7 liquidation bankruptcy, the first thing to do is to review your average income in  last six months to come up with your approximate income.If your approximate income is below the median income (as per your household size. Ex: in California it is $77,014 for a household of 4), then you passes the means test, which means that you are eligible for Chapter 7 bankruptcy. If your approximate income is above the median you would be forced to file the Chapter 13 bankruptcy which is a repayment plan.Surely you have some form of income documentation? But I would not be surprised if you don't. Many self employed/sole proprietors have the same problem and sometimes their inability to check and balance their income and expenses is what caused the bankruptcy filing.When you file bankruptcy, either Chapter 7 or 13, you would be under a court appointed trustee and he/she would be interested in the net income of your business. Net income is  gross income (no deductions yet)  minus the necessary  expenses of the business. Remember that it should come from the 6 months prior to your filing bankruptcy.

Posted on June 8, 2009 at 4:37 am It all sounds very complicated. I should probably hire an accountant to figure out what you said I should figure out. My debts are credit card debts, some loans, and some from people I know. I've been getting credit card calls. If I file this bankruptcy like I said I would would it wipe out all of those different kinds of debts? Can I pay the people I know first and the creditors and lenders last?

Posted on June 8, 2009 at 4:45 am and what are some of the things you own? As citizenoftheplanet have suggested perhaps you can just sell some of them instead of filing bankruptcy. I also read somewhere that you can't play favorite with your creditors or pay some of them off before filing. What happens is when you finally file bankruptcy the trustee, upon learning of your underhanded transaction, can and will take the money back and distribute it equally among the creditors.

Posted on June 8, 2009 at 5:16 am To add to peterpanamerican's comment, the principle behind bankruptcy is to treat all your creditors equally. You cannot pay your preferred creditor (your relative or friend, etc) more than $600 inside of the year that you filed bankruptcy.  Thecourt would look into into your transactions for the last 3 months and if it has proven that you exceeded that amount, it would ask the trustee to get that amount back. Can you just imagine the tension and embarrassment that such an act will generate? But this is a pre-filing issue, nothing can stop you from paying off your preferred creditor post-filing, as long as the money is not part of your bankruptcy estate.

Posted on September 11, 2009 at 6:34 am Bankruptcy self employed...I don't see any problem with that...for Chapter 7, pass the means test, if you fail, you can file Chapter 13...although you may need to hire an accountant for that.

Posted on September 11, 2009 at 6:50 am I agree, if a self-employed consumer files for bankruptcy, he/she should know that the bankruptcy trustee is first interested in the net income of the business (gross income minus necessary the business expenses)-see if the consumer can afford it.