If you have a job where part (or all) of your income is based on commissions, or you are self-employed in a sole proprietorship (as opposed to a corporation or LLC), and are considering bankruptcy, then you need to tread carefully.  Your commission or other business receivables might be at risk of seizure by a bankruptcy trustee.  The reason for this hinges on whether you are considered an employee or an independent contractor.

Do you work on commission, get a paycheck with tax deductions and a W-2 at the end of the year, or do you get commission checks and a 1099?  If it is the latter, when you file bankruptcy can be very important, and delaying it can cost you money.  This is because moneys due and payable to an independent contractor (or a sole proprietorship) can be considered a receivable to a business, not a paycheck, and as such an asset.  Learn more here.

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Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.