How Gig Workers and Freelancers Can File Bankruptcy
Gig workers and freelancers in Columbia, SC, can file for bankruptcy by choosing the right chapter, gathering their financial records, completing required credit counseling, filing the necessary forms, and following the court process. Being paid through 1099 work, freelance contracts, or gig platforms doesn’t automatically prevent you from filing. The process may require extra attention to changing income, business expenses, and work-related property. At Reed Law Firm, our Columbia bankruptcy lawyers can review those details with you and help you prepare for filing.
Determine Whether Chapter 7 or Chapter 13 Bankruptcy is Right For You
Most individuals considering bankruptcy will look at Chapter 7 or Chapter 13. Chapter 7 can discharge many qualifying debts, while Chapter 13 allows an individual with regular income to repay debts through a court-approved plan. Your financial situation helps determine which chapter you may use.
For Chapter 7, your income and household expenses may determine whether you pass the means test. Under 11 U.S.C. § 707(b), a Chapter 7 case involving consumer debts primarily may be presumed abusive if the debtor’s income and allowable expenses meet certain thresholds. Chapter 13 has its own eligibility rules, including limits on the amount of secured and unsecured debt and a requirement that the debtor have regular income sufficient to make plan payments.
Gather Your Gig Income, Debt, and Business Records
Before filing, gather records showing where your money comes from and where it goes. These may include 1099 forms, bank statements, invoices, payment-platform records, and business expense receipts. You also need information about your debts and property. Make a list of credit cards, loans, medical bills, tax obligations, and other debts. Identify vehicles, computers, tools, inventory, business accounts, and money clients still owe you.
Complete Credit Counseling Before Filing
Most individual debtors must complete an approved credit counseling course within 180 days before filing for bankruptcy. The counseling session reviews your financial situation, debts, income, and expenses, and may help you consider alternatives to bankruptcy. You generally complete it with an approved provider before filing and receive a certificate showing that you completed the requirement.
Prepare The Petition, Schedules, and Exemptions
Your bankruptcy petition officially starts the case, but it is filed with additional documents covering your income, expenses, debts, assets, and financial history. Work-related property needs to be listed accurately, including vehicles, computers, tools, equipment, inventory, and business accounts. South Carolina’s exemption law also matters. S.C. Code § 15-41-30 identifies property that may be exempt from attachment, levy, sale, or bankruptcy proceedings, including certain interests in a home, vehicle, household property, and tools of a trade.
File Your Case With The U.S. Bankruptcy Court in Columbia
If your case belongs in the Columbia Division, you can file with the U.S. Bankruptcy Court for the District of South Carolina. The court states that debtors who have completed the required documents and pre-filing credit counseling may file in person or by mail, with electronic filing options also available for qualifying self-represented debtors. You may have to pay a filing fee, although qualifying debtors may have options for a waiver or payment arrangements depending on the circumstances.
Attend The Meeting of Creditors and Finish The Case
After filing, a trustee is assigned to your case. You must attend a 341 meeting of creditors, where the trustee can ask questions about your petition, income, debts, property, and financial affairs. Your case may require additional documents or information. Chapter 13 cases also involve review and confirmation of the proposed repayment plan. Before receiving a discharge, you generally must complete a required financial-management course and satisfy the other requirements that apply to your bankruptcy chapter.
Our Bankruptcy Attorneys in Columbia Are Ready to Assist You
Before filing as a self-employed individual, contact Reed Law Firm at 803-726-4888 or online to request your confidential case review. Our Columbia bankruptcy attorneys can help you organize income from multiple sources, account for legitimate business expenses, identify property that must be disclosed, apply South Carolina exemptions, and determine whether Chapter 7 or Chapter 13 better fits your circumstances.
