Maryland Chapter 13 Bankruptcy and Gig Economy Workers

 Posted on October 08, 2025 in Chapter 13 Bankruptcy

While the U.S. statistics regarding freelance or gig workers vary, it is estimated that in 2024, between 57 and 70 million people in the U.S. were engaged in freelance work – a staggering 36 to 40 percent of the adult workforce. This trend is expected to grow, with some sources predicting as many as 87 million freelancers by 2027. While some freelancers are moonlighting from their "primary" job as a means of increasing their income, for a significant portion of gig workers, this is their only source of income.  

The unusual income patterns of freelancers can make it challenging to propose a feasible Chapter 13 bankruptcy repayment plan. Bankruptcy courts generally lag behind in assessing "regular income" for plan feasibility. If you are struggling with debt as a Maryland freelancer, you can learn how bankruptcy might affect you by speaking with an experienced Charles County, MD consumer bankruptcy lawyer.  

What Types of Gig Workers Are in Maryland?

Although the gig economy offers a level of freedom that a typical 9-to-5 may not, it does not always provide the same level of financial security. This economic instability can leave freelancers vulnerable to debt. As debt continues to grow, the question of whether a gig worker can apply for bankruptcy becomes increasingly important. The most common types of gig workers in Maryland include:

• Uber and Lyft drivers
• DoorDash drivers
• Amazon Flex employees
• Online content producers and web designers
• Instacart workers (who shop for others and deliver the items)

Any independent contractor can be considered a freelancer, which expands the category to include a wide range of professionals, such as handymen, painters, dog walkers, house sitters, graphic designers, photographers, IT technicians, real estate agents, accountants, tax preparers, and courier services, among others.  

Can a Gig Worker File for Chapter 13 Bankruptcy?

The central tenet of Chapter 13 bankruptcy is that the individual must have "regular" income. This can include income from self-employment and gig work, even if the monthly amounts vary. The requirement will be to demonstrate that income is consistent enough to support a repayment plan. Since a gig worker’s income can fluctuate so much, documentation must be provided to show a "steady" income stream. This documentation can include:

• Bank statements
• 1099s
• The past four years of tax returns
• Profit and loss statements for the business
• Contracts
• Payment receipts
• Invoices

Sole Proprietorships and Chapter 13 Bankruptcy

If an individual operates as a sole proprietor, both business and personal finances are treated as a single entity for the purpose of filing Chapter 13 bankruptcy. This means that business debts can be included in your personal Chapter 13 filing. Chapter 13 allows the business owner to reorganize and repay both personal and business debts over a period of three to five years, while preserving both business and personal assets. As of April 2025, the combined unsecured personal and business debt limit for Chapter 13 was $419,275, while the secured personal and business debt limit is $1,257,850. Chapter 13 is only an option for sole proprietors, not corporations or LLCs.

Tips for a Smoother Chapter 13 Bankruptcy Process as a Freelancer

Hopefully, freelancers have been meticulously tracking their income since they began gig work. This will make it much simpler to provide necessary documentation – and much more likely that the individual will qualify. Always keep personal and business finances separate when possible, so it can be shown that excess personal credit was not used to fund the business. Working with a bankruptcy attorney who is familiar with gig work is also likely to produce a better outcome.  

Contact a Bowie, MD Chapter 13 Bankruptcy Lawyer

If you are struggling to make ends meet as a gig worker in Maryland, you may face unique financial challenges. Bankruptcy may be an option; however, as a freelancer, bankruptcy comes with more requirements to prove "regular" income. A Charles County, MD bankruptcy attorney from Bloc One Services, LLC can help you determine your best course of action. Attorney Blocton helps clients "Rebuild Your Future with Hope," while providing the local community with quality legal services at a reasonable price. Call 240-200-0076 to schedule your free initial 30-minute consultation.