Income Taxes are non-consumer debt, page 6-11 or the Trustee Handbook.

[biotechsolution]

Freshstart06:

If the majority of your taxes are income or self-employment taxes they are considered non-consumer debt. Now remember
you have to include all your debt, even secured debt that you are not discharging, like autos and mortage.

Neither the means tests or the any for the form 22's apply to you.

Page 6-11 of Chapter 7 Trustee Handbook.

"The most common consumer debts are home mortgages, credit card debts, and personal loans. See Wyman, A 707(b) Sampler, Norton Bankruptcy Law Adviser, Issue No. 5, page 2 (May 1994). Debt incurred for a business venture or with a profit motive is not a consumer debt. Cypher Chiropractic Center v. Runski (In re Runski), 102 F.3d 744, 747 (4th Cir. 1996).
Debt that is owed for income taxes is not consumer debt. In re Westberry, 215 F.3d 589, 591-94 (6th Cir. 2000)."[/COLOR]


And this is not busiess income tax, it's personal income and self-employment taxes.

I am still amazed how many attorneys still do not know this.


And it scares me to think how many people are forced into 13 because of an incompetent attorney.

[HHM]

Thank you for clarifying the issue.

My only concern is that all those decisions are pre-2005 new law, but as far as I know, the new law did not make any meaningful changes as it relates to what is or is not considered consumer debt.

However, you make a good point, the percentage is based on ALL your debt, secured, unsecured, taxes, etc. So, even if most of the debt you are attempting to discharge is back-taxes, if you have a mortgage, you likely do not have the majority of your debt as non-consumer. '

In any event, thank you for looking that up.

[familyof7]

Wow!!

[biotechsolution]

This is still the case post-2005 laws.

There have been a few discharges post-2005 that have
been strictly tax based bankruptcy.

They were treated no differently.

But the key is when added up all your debt to be safe at least 60% of your total debt should be tax or business based to be safe.

However, there has been plenty of case law determining that even 51-53% would still be considered a majority.

But why take a chance.

[freshstart06]

Oh my Gawd, a big THANK YOU... I am safe. The only problem is that I took the means test and I don't think my paralegal was aware of this. Yes, Over 50% of our debt is income tax, it is a mess. We also was getting sued for option money on a home we did not purchase because of my detached retina. That option money was $10000. If it wasn't for the income tax and the option we really would not be in that much debt. I kept talking about my income tax on here but I don't think anyone noticed LOL.

I am telling you, my 341 meeting went too smooth and no questions and know I think that is way because my husband's income alone is above the median but we have a lot of medical expenses. We are safe from abuse and we have no disposable income. I have something to fight if things go soar.

THANKS BIOTECHSOLUTIONS for all your help. I knew something good was going to happen.