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Filing for Chapter 7 bankruptcy as a freelancer in Florida can feel like navigating a completely different world compared to traditional W-2 employees. Without regular pay stubs or consistent income, proving eligibility and documenting finances becomes more complex. In this article, we’ll break down…
The main challenge freelancers face is the lack of structured documentation. W-2 employees typically have pay stubs, which clearly show income, deductions, and employment history. That makes it easy to determine whether they qualify for Chapter 7.
Freelancers, on the other hand, have to piece together that financial picture themselves. How easy or difficult that is depends on how organized they are. Some freelancers keep meticulous records of business income and expenses. Others operate more informally, living month to month out of their personal bank account. When the latter is the case, my job becomes more difficult.
It also comes down to how their income and expenses are calculated. Gross income is a big factor in determining eligibility. If a freelancer earns a high gross income without enough corresponding business expenses, qualifying for Chapter 7 could be more difficult. In borderline cases, even something like disorganized bank statements can end up jeopardizing the case.
When it comes to gig workers, like people who work with companies like Uber, Lyft, and Instacart, they often have an advantage because those platforms usually provide monthly earnings statements. That makes it easier to show income and fees deducted by the company. However, not every expense is included. For example, Uber drivers must account for costs like gas and car insurance separately.
From my perspective, there’s not a huge difference between freelancers and gig workers in terms of income reporting since they’re both 1099 workers. But there is a difference in complexity: Freelancers often run their own businesses and may have business assets, which can complicate a bankruptcy filing. Gig workers typically operate under the umbrella of another company and don’t have assets tied to a personal business.
Overall, gig workers tend to be easier to work with in bankruptcy cases, mainly because many aren’t earning enough to make their cases complicated.
Alec Solomita, founding attorney of Solomita Law, PLLC, has guided countless freelancers, gig workers, and small business owners in Florida through the complexities of Chapter 7 bankruptcy.
With years of experience handling cases where income is inconsistent or difficult to document, Alec Solomita understands the unique financial realities of 1099 workers and how to tailor legal strategies accordingly. His deep knowledge of bankruptcy law and client-focused approach have helped many secure a fresh start.
If you're struggling with debt and unpredictable income, contact Solomita Law, PLLC today to explore your options with confidence.
Eligibility for Chapter 7 is based on your average gross income over the past six months. So if you’ve recently had a strong run of income, that can push your average too high to qualify. Timing is especially critical. For example, if you’re in a slow period and your income is low, filing during that window might help your case, even if it doesn’t fully represent your typical income level.
Take a realtor, for instance: they might go three months without a sale, then suddenly earn $30,000 in one month. That one large payout can skew their six-month average and disqualify them from Chapter 7, even though their income isn’t always that high.
It depends on how often those apps are used. Technically, all income should be disclosed. But if someone rarely uses Venmo or Cash App, I might not bother listing those transactions unless I’m asked to or if they show up frequently in bank statements. If I do see frequent transfers like sending or receiving money via Venmo or Cash App, I’ll request full transaction histories. In those cases, those apps become relevant financial records and need to be accounted for.
The strategy really depends on when the client contacts me. If someone comes to me right after their business starts to slow down, it’s usually not the right time to file. Their bank statements from the previous six months may still show high activity, which raises red flags and prompts additional questions.
In those situations, I often advise them to wait a little longer and give the downturn time to reflect more clearly in their financial records. That way, when they do file, there are fewer complications. Here’s how I generally approach it:
Sometimes it’s just a matter of timing. If someone’s income was unusually high in February, and it’s now July, we might wait until that income falls outside the six-month window and re-evaluate in September. That flexibility often makes the difference between qualifying and not.
For more information on filing for Chapter 7 bankruptcy as a freelancer in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 305-5599 today.
Alec Solomita, founding attorney of Solomita Law, PLLC, has guided countless freelancers, gig workers, and small business owners in Florida through the complexities of Chapter 7 bankruptcy.
With years of experience handling cases where income is inconsistent or difficult to document, Alec Solomita understands the unique financial realities of 1099 workers and how to tailor legal strategies accordingly. His deep knowledge of bankruptcy law and client-focused approach have helped many secure a fresh start.
If you're struggling with debt and unpredictable income, contact Solomita Law, PLLC today to explore your options with confidence.
