Profit & Loss Statements when Filing Bankruptcy
When a Debtor decides to file a bankruptcy, regardless if it is a Chapter 7 or Chapter 13, they must provide pay stubs or profit and loss for the previous 6 months. If a Debtor is not working a regular job where they receive pay stubs, they need to fill out a profit a loss.
I have many Debtors who have done cash jobs on the side to try and make ends meet. Even with this type of income, they must fill out a profit a loss. Most Debtors it is a very basic form to fill out. The main information that is needed is the Gross Income (income before any deductions) and Business Expenses. Sometimes it is hard to distinguish between a personal expense and a business expense if the Debtor works from home. However, there is a place on the schedules to list personal expenses. The Debtor just needs to make sure the expense is listed in only one of the two places.
One of the best ways to determine if it is a business expense or a personal expense is to look at where the money comes from to pay the bill. If it is paid out of the business account, it should be considered a business expense, but if it comes out of a personal account, it is probably a personal expense.
Please fill out our free evaluation form to determine if bankruptcy is right for you.
