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Part of your trustee’s responsibilities in dealing with a Debtor who owns a business and files for bankruptcy includes verifying business income. For most bankruptcy debtors, this is easily accomplished by providing the trustee with copies of paycheck stubs from their employer. However, debtors in bankruptcy that are self-employed or own a business generally do not have paycheck stubs to provide to the trustee. In these situations, the trustee may require additional documentation, such as business profit/loss statements, monthly business operating statements, and/or business tax returns to verify the income.
As a self-employed debtor or business owner, you are generally permitted to continue the regular operation of your business. If your business enterprise incurs trade credit in the production of income or otherwise meets the threshold, your trustee may determine that you are “engaged in business.” If the trustee determines that you are “engaged in business,” you will likely need to provide additional documentation such as tax returns, financial records, and other business records to the trustee. These documents enable the trustee to perform an investigation of the business and prepare a Statement of Investigation, as required by BAPCPA. In addition, the business may be subject to periodic monitoring by your trustee.
Depending on what type of business entity you have, whether it is a corporation (INC), limited liability company (LLC), partnership, sole proprietorship, the best bankruptcy route and analysis should be done by a experienced bankruptcy lawyer.
Please contact bankruptcy attorneys at Phan, Nguyen and Associates in Oakland, CA, San Jose, CA, and San Francisco today for a business bankruptcy consultation.