Self employed filing for BK

Anonymous · ‎01-26-2017

My sister in law is self employed, and filing for bankruptcy. It seems as if everyone in our area we've talked with wants to charge her for travel time to the 341 meeting, and more since she's filing and self employed. She's only filing due to personal debt (CCs), not business debt. I was just wondering if anyone else who's self employed and filed had the same experience where the attorney wants to charge more for the entire thing. I went with her today to a meeting, and asked why she was charging 3x more than what she would charge for a personal BK and she just said "more time" but wouldn't elaborate.

Thanks!

Guyatthebeach · ‎01-28-2017

I'm not self employed but that does not sound right to me at all. I know there is a little bit more involved when you're self employed.

The lawyer I used for my bankruptcy lived an hour away from the court and didn't charge travel time.

I would find another attorney. I would look for a lawyer that charges a flat fee. I would start by calling your state's legal bar and ask for recommendations.

despritfreya · ‎01-28-2017

If everyone in her area is charging extra to attend the 341 I must assume she lives far away from the bk court. If that is the case and she does not want to pay extra have her locate a bk attny who is closer to the bk court.

Charging more for someone who is self employed is not unusual. Does she operate as a sole proprietorship, a corporation or a LLC? Each has its own complications. If she operates as a sole proprietor, ALL creditors regardless of whether or not they are “business” or “personal” must be listed. If she operates as a corporation or a LLC she must list all business obligations that she “personally guaranteed”.

Additional issues pertain to means testing. If she operates as a sole proprietorship, ALL gross (not net) income must be used in determining if she is above or below median income. If she operates as a corporation or LLC, depending upon how her jurisdiction handles such matters, all draws or payments by the entity to or for her personal benefit must be accounted for.

There are a ton of other issues when one owns their own business.

Your SIL chose to be self employed. Unfortunately she is not a “simple” case and will have to pay extra for the benefit of attny representation.

Des.

StartingOver10 · ‎01-28-2017

despritfreya is right. The last place you want to nickle and dime is with a Bk attorney when you have a more complex case. She needs to find an excellent Bk attorney that can help her especially since she is self employed.

Anonymous · ‎01-31-2017

Thank you for the feedback. Her lawncare business is an LLC. I'll make sure she has a print out for her mower she financed to take with her, and the print out of her business and personal checking/savings (if she has any). The business pays her and she has a W2 for last year and her taxes taken out as if she's an employee. I had her call a few other attorneys in our area and ask them if what their fees were and if it mattered if she was SE or not. The area we live is split realy weird and in Oregon, so the district her BK has to be filed in is about 2 hours away from where she lives. The attorney I'm going with her to meet this week is a flat fee, and I had to help hold her hand to gather all her paperwork.

I do have another question. The business she has she basically was "handed" from her old boss who had the company for a few years before he gave it to her when he retired. They had basically a really laid back, sort of verbal agreement that she would pay him 1k a month for 24 months for him giving her the business. It doesn't seem as if anything is written down, or "legal" just an old hand shake agreement type. Is this something she should bring up to the attorney or not bother since there isn't a paper trail?

Anonymous · ‎01-31-2017

@Anonymous wrote:
Thank you for the feedback. Her lawncare business is an LLC. I'll make sure she has a print out for her mower she financed to take with her, and the print out of her business and personal checking/savings (if she has any). The business pays her and she has a W2 for last year and her taxes taken out as if she's an employee. I had her call a few other attorneys in our area and ask them if what their fees were and if it mattered if she was SE or not. The area we live is split realy weird and in Oregon, so the district her BK has to be filed in is about 2 hours away from where she lives. The attorney I'm going with her to meet this week is a flat fee, and I had to help hold her hand to gather all her paperwork.

I do have another question. The business she has she basically was "handed" from her old boss who had the company for a few years before he gave it to her when he retired. They had basically a really laid back, sort of verbal agreement that she would pay him 1k a month for 24 months for him giving her the business. It doesn't seem as if anything is written down, or "legal" just an old hand shake agreement type. Is this something she should bring up to the attorney or not bother since there isn't a paper trail?

The rule here is - bring up 'EVERYTHING' with your attorney...they're the ones who will tell you if the trustee needs to know about it.

Cheers!