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Lane
Lane, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 3716
Experience:  Providing Financial & Tax advice since 1986
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My husband & I filed for chapter 13 to protect our homes after

Resolved Question:

My husband & I filed for chapter 13 to protect our homes after losses of both our jobs. I was not employed for 30 months. I am now a temp. and would like to obtain a permanent position with company. The company does not have an opening but wants to hire me as a contractor since they really need my services. I have to get a business license so I could be paid as a contractor for at least 18 months till they have an open position for my qualification. Will chapter 13 prevent me from doing business as sole proprietor?
Submitted: 8 months ago.
Category: Finance
Expert:  Lane replied 8 months ago.

Lane :

Hi,

Lane :

NO not at all ... sole proprietor is actually what the IRS calls a disregarded entity, meaning that you just file a schedule C - a schedule of the1040, (to report income and business expenses) that simply flows to line 12 of the 1040 (personal tax return) - Business income or loss

Lane :

the chapter 13 ( designed as a fresh start, a Federal statute, allowing one to escape the typical debtor/creditor law of the various states) of title 11 of the bankruptcy code - allows you to do essentially whatever you want ... in terms of starting new businesses, etc (Credit bureaus may not allow for a lot of credit at first - although Bankruptcy CAN generate new credit more quickly than than those with BAD credit that do nothing about it) - your bankruptcy does not in any way stop you from doing all the things that the constitution gives you the right to do ... start businesses, own assets, etc

Lane :

Questions?

Lane :

I still don't see you coming into the chat session, so I'll move us to the "Q&A" mode. … Maybe that will help … (We can still continue a dialogue there, just not in real-time chat, as we can here)

Lane :

If you have any questions at all, let me know

Lane :

If this has helped, I would appreciate a feedback rating of 3 (OK) or better (excellent, is ideal)… That's the only I get credit for the work.


However, again, if you need more on this, please come back here, so you won't be charged for another question.

Lane :

Let me know ...

Lane :

Lane

Lane, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 3716
Experience: Providing Financial & Tax advice since 1986
Lane and 2 other Finance Specialists are ready to help you
Expert:  Lane replied 8 months ago.

Hi Kaleigh,

 

Our chat has ended, but you can still continue to ask me questions here until you are satisfied with your answer. Come back to this page to view our conversation and any other new information.

What happens now?

If you haven’t already done so, please rate your answer above. Or, you can reply to me using the box below.

 

But again, let me know if you have any questions.

 

And again, No, there is no problem working as a sole proprietor after before or during Bankruptcy.

 

Lane

 

Expert:  Lane replied 8 months ago.
Hi Kaleigh,


I'm just following up with you to see how everything is going. Did my answer help?


Let me know,
Lane
Customer: replied 8 months ago.

The bank asked me to get a TIN for my business (sole p) to open a business checking account, but online filing does not do a TIN but an EIN. What is the difference, which one is right for this type of business?


I now have a business licence with my state.


 

Expert:  Lane replied 8 months ago.

The EIN (Employer Identification Number) is one form of a TIN

TIN is the broader Tax Identification Number. Social Security number, for example, is ANOTHER Tax ID (Tax Identification Number)

The EIN is a TIN.

They're just asking for you to get a separate Tax ID for the business ... Legally you don't have to, but they CAN require you to, as their own policy, for opening an account that is a "Business account."

... actually not a bad idea, in the event that you ever have any employees ... (also a good way to start building a good credit profile for your business)

The EIN (again, one of the many forms a tax ID can take) is what they're looking for.

Lane

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