Are You a Freelancer? Here are 3 Bankruptcy Issues to Think About

A person holding an empty walletAccording to the Freelancing in America: 2017 report, about 57.3 million Americans are currently working as freelancers. That’s roughly 36 percent of the entire U.S. workforce and it shows nearly 30 percent increase since the figures from 2016.

If you are one of the hustling freelancers in the country, here are some bankruptcy issues you should consider so that you can protect yourself during rainy days:

You need to know how to file for bankruptcy

If you’re a freelancer and you’re a sole proprietor, keep in mind that you and your business are legally one and the same entity. The type of business you have determines the requirements you need to file for bankruptcy should you ever come to that point. If you’re not sure how to go about it, you can get the help of a bankruptcy lawyer, as recommended by barskilaw.com.

You can have trouble finding stability

When you’re freelancing, there’s no limit to how much you can earn in a day. You’re not confined to your 9-5 schedule or your daily income. Instead, the more clients you have, the more billable hours you can generate and the higher your income. But it can be difficult to find stability at first if you’re a freelancer, so you need to find ways to get more clients through lead generation.

You can have trouble verifying your income

If you file for bankruptcy, you need to verify your sources of income to the court. When you’re a freelancer with multiple clients, it can be difficult to determine an hourly rate. So, you need to provide invoices, contracts, and other paperwork and email threads that can help you verify your income. That’s why proper documentation is very important in the freelancing business.

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Based on studies, experts say that majority of the workforce in the U.S. would be made up of freelancers by the year 2027. If becoming a freelancer is in your plan, make sure you also think of the possibility of bankruptcy to better equip yourself with the right mindset.