The Reality of Being an Independent Contractor
Many people in Nebraska drive for Uber or deliver for DoorDash. They often view these jobs as simple side hustles. However, the legal reality is quite different. If you work in the gig economy, you are an independent contractor.
This status means you are essentially a business owner. You operate as a sole proprietorship in the eyes of the law. You and your business are one legal entity. Therefore, filing for bankruptcy requires a specialized approach.
Why Your Gig Work is a Business Entity
When you act as an independent contractor, you do not have an employer. You provide services for a fee. This makes you a sole proprietor.
In a bankruptcy case, this distinction matters a great deal. Your personal assets and your business assets are connected. Consequently, your gig income must be reported as business income. You must treat your earnings with the same care as a large corporation.
Record Keeping for the Independent Contractor
A successful bankruptcy filing depends on accurate data. Because you are a business owner, your records must be thorough. You need to track every dollar earned from every platform.
Furthermore, you must track every allowable business expense. These expenses might include gas, car repairs, or phone bills. Without these records, calculating your true income is nearly impossible. Detailed bookkeeping ensures your bankruptcy petition is correct.
Drafting Your Bankruptcy Schedules
The court requires detailed forms called schedules. These forms list your income, assets, and debts. For an independent contractor, this process is often complex.
You must show your gross income first. Then, you subtract your business expenses to find your net income. This calculation is used for the “Means Test”. This test determines which type of bankruptcy you can file. Consistent records make this step much smoother.
Challenges for the Independent Contractor
Income for gig workers is rarely steady. It can fluctuate from week to week. This unpredictability creates challenges during the filing process.
The court typically looks at your average income over six months. If you have a busy month, it could skew your numbers. A qualified attorney helps you explain these variations to the trustee. We ensure your filing reflects your true financial situation.
Protect Your Tools and Equipment
As a gig worker, your car is your livelihood. You may also use a home office or specialized tools. In a sole proprietorship, these are considered business assets.
Fortunately, bankruptcy laws allow you to protect these items. We use specific exemptions to shield your tools of the trade. This allows you to keep working after your case is over. Proper planning is the key to keeping your equipment.
Why You Need Expert Legal Help
Navigating bankruptcy as an independent contractor is difficult alone. The documentation requirements are very high. A single mistake on your schedules can cause delays.
At Caldwell Law, we understand the gig economy. We help you organize your records and draft your petition. Our team ensures you take advantage of every available protection. We are here to guide you toward a fresh start.
Schedule Your Consultation Today
Are you ready to take control of your financial future? If you work as an independent contractor and feel overwhelmed by debt, we can help. Our experienced team will review your records and explain your options. We provide compassionate legal care for every client.