What constitutes business debt vs consumer debt

[Granny]

One of our secured creditors has now filed a motion to lift the stay against our secured debt for the truck. In their motion, they are claiming
1. Spouse is not entitled to protection under the bk code (spouse did not file)
2. Debtor's individual obligation under the installment loan represent a business obligation and not a consumer debt.
3. The debtor's plan failed to provide for payment of the full amount of the secured claim and failed to provide for a rate of interest reasonable uinder the circumstances to compensate credit for its actual level of risk, which credit contends is 13.95%
4. The debtor failed to provide or propose Adequate Protection Disbursement. The debtor's proposed Adequate Protection Disbursement is 25.77 per month (.07656% rather than the suggested 1.25% of the value which would be 525.00 per month)
5 The debtor has no interest in the vehicle, it being in the name of the corporation.
6. The BK was filed in bad faith (this REALLY bothers me for them to make that claim). It makes me sound like a thief and a deadbeat.

Are these guys gonna be able to repo the truck or in the alternative, require us to pay an additional 525.00 per month? Where does that 525.00 per month go, is it applied to the total due to the creditor or is it just money down the drain for nothing.

Additional info is...we purchased this truck in 2004 with a 4 year note. The transmission died last October and we refinanced the truck to include the repair bill and signed a new note. I filed bk 4 days after the first payment was due (to save my house). The original note was in the name of our corp. but when we refinanced in Oct, the corp status was not in good standing and we were forced to sign individually instead of as officers of the corp. As of Oct we had approx 10k equity.

One final note, this is how we earn our income, if we lose this truck we lose everything, including our home unless one or both of us gets a good paying job immediately.

What do you think?

[SamanthaJones]

Good question, Granny-

I finally found the answer- in the bankruptcy code (I'll try to recall the actual paragraph). To claim business vs consumer debt (which also means no means test) you have to be 'in' business- corporation, or etc, and all that is involved in a business. (I was advised that having rental properties probably constituted 'business' vs 'primarily consumer debt', which is why I needed a concrete answer. And that's my final answer.

[HHM]

I don't have time to answer you in depth, but you ARE going to lose the truck, sorry!

[Granny]

Thank you HHM. That's what the lawyers, both #1 and #2 haven't had the balls to tell us. Guess I better start finding boxes to move.

[Spartan]

Why do you need to "start finding boxes to move"? You are losing your truck, not your house.

[bige1030]

One of our secured creditors has now filed a motion to lift the stay against our secured debt for the truck. In their motion, they are claiming
1. Spouse is not entitled to protection under the bk code (spouse did not file)

Too bad for them there's a co-debtor stay in Chapter 13.

2. Debtor's individual obligation under the installment loan represent a business obligation and not a consumer debt.

This one makes me laugh...chapter 13 can be used for business debts, so long as the filer is an individual.

3. The debtor's plan failed to provide for payment of the full amount of the secured claim and failed to provide for a rate of interest reasonable uinder the circumstances to compensate credit for its actual level of risk, which credit contends is 13.95%

Till rate, anyone? (Prime rate plus 1 to 3%.)

4. The debtor failed to provide or propose Adequate Protection Disbursement. The debtor's proposed Adequate Protection Disbursement is 25.77 per month (.07656% rather than the suggested 1.25% of the value which would be 525.00 per month)

If you have $10,000 equity in the truck, there should be no need for adequate protection payments beyond your regular monthly payment on the truck. If you re-amortize the loan, though, you have to ensure that the collateral doesn't depreciate to the point that the creditor is undersecured. And of course, adequate protection payments decrease the balance of your loan.

5 The debtor has no interest in the vehicle, it being in the name of the corporation.

I'm not sure if this is grounds for relief...but if it is, it's possibly their strongest argument.

6. The BK was filed in bad faith (this REALLY bothers me for them to make that claim). It makes me sound like a thief and a deadbeat.

I wonder if they're just shooting darts at the bullseye...it surely sounds like it. This one, I think, probably hit the wall about three feet away from the center! But seriously, I wonder why they're making a bad faith contention.

[Granny]

Why do you need to "start finding boxes to move"? You are losing your truck, not your house.

The truck is our only real source of income. If we lose the truck, we have no way to make the mortgage payment or the CH 13 payment.

[quietsound]

You know Granny, I am SOOOO sorry you have to go through this crap! I know you must be sick and a wreck over this whole thing. I wish I could take it all away from you.......All you want to do is just make your payment and get on with life, Or try to pick up the broken pieces and move on.

I'm so sorry.

[Granny]

[/quote] I wonder if they're just shooting darts at the bullseye...it surely sounds like it. This one, I think, probably hit the wall about three feet away from the center! But seriously, I wonder why they're making a bad faith contention.[/QUOTE]

They are saying it was bad faith becuase I filed Bk before any payments on the refinanced note were made. The BK was filed 4 days after the first payment was due.

They didn't however mention that I made a payment with the refinancing, which is what led to the foreclosure on the house. I paid them before I paid my house, too many times.

[lrprn]

Granny, I'm so sorry this is happening to you.

There's a 2004 article written by two New Jersey bankruptcy lawyers at http://searchwarp.com/swa2014.htm that explains how the New Jersey bankruptcy court determines "bad faith" and whether it is grounds for Ch 13 dismissal. The following factors are considered:
"1. The nature of the debt
2. The timing of the petition
3. How the debt arose
4. The debtor’s motive in filing the petition
5. How the debtor’s actions affected creditors
6. The debtor’s treatment of creditors both before and after the petition was filed and
7. Whether the debtor has been forthcoming with the Bankruptcy Court and the creditors.

In In re Goddard, supra, the court focused on consideration of the following principal factors in deciding a motion to dismiss a Chapter 13 case for cause:
1. Whether the debtor has stated his debts and expenses accurately
2. Whether he has made any fraudulent misrepresentations to mislead the Bankruptcy Court or
3. Whether he has unfairly manipulated the Bankruptcy Code."

I'm guessing that the Texas court will look at pretty much the same factors in your case.

What does your lawyer say your chances are that the judge will find you filed in good faith? One advantage you do have...Texas is known to be a more bankruptcy-friendly state. Hope you get a judge that realizes your sad family situation is what forced you into bankruptcy, not a desire to hide assets by lying to the court or using filing to sweep a crime under the rug - the typical things that trigger bad faith accusations that are upheld by the court.

[Granny]

Granny, I'm so sorry this is happening to you.

There's a 2004 article written by two New Jersey bankruptcy lawyers at http://searchwarp.com/swa2014.htm that explains how the New Jersey bankruptcy court determines "bad faith" and whether it is grounds for Ch 13 dismissal. The following factors are considered:
"1. The nature of the debt
2. The timing of the petition
3. How the debt arose
4. The debtor’s motive in filing the petition
5. How the debtor’s actions affected creditors
6. The debtor’s treatment of creditors both before and after the petition was filed and
7. Whether the debtor has been forthcoming with the Bankruptcy Court and the creditors.

In In re Goddard, supra, the court focused on consideration of the following principal factors in deciding a motion to dismiss a Chapter 13 case for cause:
1. Whether the debtor has stated his debts and expenses accurately
2. Whether he has made any fraudulent misrepresentations to mislead the Bankruptcy Court or
3. Whether he has unfairly manipulated the Bankruptcy Code."

I'm guessing that the Texas court will look at pretty much the same factors in your case.

What does your lawyer say your chances are that the judge will find you filed in good faith? One advantage you do have...Texas is known to be a more bankruptcy-friendly state. Hope you get a judge that realizes your sad family situation is what forced you into bankruptcy, not a desire to hide assets by lying to the court or using filing to sweep a crime under the rug - the typical things that trigger bad faith accusations that are upheld by the court.

I'm so glad that you brought up the point of what put us/me into bankruptcy. No one has ever even asked what put us there, I was beginning to think that the judicial system doesn't care what happened, that they are just a bunch of money hungry wolves. Will it ever come up in court; will I have a chance to explain why, a chance to show that I wasn't trying to evade anything except foreclosure on my house.

And to answer your question about what is my attorney saying....I qoute "Don't worry". That is his full explanation. This is attorney #2, who didn't file the "Motion to Substitute Counsel" until yesterday, after the motion for relief from stay was filed and after I called his office again to see if anything was new, and after the girl told me that the motion to substitute had been filed. Keep in mind I had just checked Pacer and it wasn't there. She checked Pacer and lo and behold, the client was right. She said she'd have atty #2 call me right away....which he did, 3.5 hours later and after a song and dance, said "Don't worry"

I went to bed last night thinking f**k it, it's out of my hands now, please God, open a window.....

Today I got a lead on a job that could end all of this mess...even without that d*mn truck. Hubby can come home and be my wife for a change.

Keep your fingers crossed...and God, I'm counting on you to pull me out of this mess.

[Spartan]

.......Today I got a lead on a job that could end all of this mess...even without that d*mn truck. Hubby can come home and be my wife for a change.

Keep your fingers crossed...and God, I'm counting on you to pull me out of this mess.

"The Lord is my shephard
There is nothing I shall want
.....
In sight of my enemies, He prepared a banquet for me
My head he annointed with oil. My cup overflows....

Surely, goodness and kindness shall follow me all the days of my life.."

[Granny]

Today I got a lead on a job that could end all of this mess... Hubby can come home and be my wife for a change.

My apologies to all the wives in the world, I didn't mean that the way it sounded. But for lack of a better word, that was all I could come up with. Maybe I should have said "my personal assistant" or better yet, my house boy. he he

We all work hard at our jobs as wives and mothers and I in no way meant to downgrade the esteemed position of a wife. We can not be replaced or substituted.

[Granny]

"The Lord is my shephard
There is nothing I shall want
.....
In sight of my enemies, He prepared a banquet for me
My head he annointed with oil. My cup overflows....

Surely, goodness and kindness shall follow me all the days of my life.."

Well, that window was slammed shut. I knew when I quit my job to take care of the baby that I would have a difficult time going back to work if I ever wanted to, but the recruiter was very matter of fact that I would not be a good candidate for them to present to an employer because I haven't worked in 4 years. What, did I get stupid in that time? She had the guts to say that I haven't worked a 40 hour week and haven't had anyone to answer to in the 4 years. Bull.!!! I've been putting in 120 hour weeks and we had to jump through the hoops of the social workers and courts to adopt the kids. Not to mention the work I have done for my husband's trucking company and the accounts that I work on here at home.

However, on a lighter note, I saw a job posting in the trustee's office that I am qualified for that pays up to 6 figures, you think he would hire me? Wouldn't that be a riot.

[Spartan]

Well, nothing venture nothing gained. What do you get to lose? Aplly for the job and stress your qualification. Don't go the standard stuff. Talk about your special situations as you have just described above. People get sick of reading the same cookie cutter resume and cover letter. Tell your story and explain why and how that makes you uniquely qualify for the position. It may just work.

I'll be damn. They can't touch the 6 figure you will be pulling in!! Ain't that the irony!!