Income derived from self-employment


M

Mr. Smith

As regards a BK filing. My income is derived from a sole proprietorship. I
am a consultant. If I have regular weekly checks for services rendered, how
does the trustee see that? As income or accounts receivable? Thanks...
 
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T

Thoth

Mr. Smith said:
As regards a BK filing. My income is derived from a sole proprietorship. I
am a consultant. If I have regular weekly checks for services rendered, how
does the trustee see that? As income or accounts receivable? Thanks...
Are the services rendered substantially contemporaneous with the weekly
checks? Or were the services rendered in the past, and the weekly checks
are bringing down the balance of a debt owed to you? If the latter, the
debt, or account receivable, should be scheduled as an asset.

Another way to look at it is: Do you have the right to collect these checks
whether or not you go to work tomorrow? If the answer is no these payments
should only be scheduled as income (and probably as an executory contract if
there is a long-term consulting agreement).
 
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M

Mr. Smith

Thoth said:
proprietorship.

Are the services rendered substantially contemporaneous with the weekly
checks? Or were the services rendered in the past, and the weekly checks
are bringing down the balance of a debt owed to you? If the latter, the
debt, or account receivable, should be scheduled as an asset.

Another way to look at it is: Do you have the right to collect these checks
whether or not you go to work tomorrow? If the answer is no these payments
should only be scheduled as income (and probably as an executory contract if
there is a long-term consulting agreement).
Thanks for reply. The checks are paid weekly for work done the previous
week. They are not a paydown of an existing receivable. This is an
open-ended contract.
 

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