I've really searched and I think this forum could use a thread devoted to demystifying the nonconsumer CH7 BK. I'm going to list some things I think are true based on what I'm reading, and you all are invited to correct, add to the list of all things applicable to this form of CH7 BK, and add clarity based on your own filing experiences regarding nonconsumer CH7. Thanks in advance for helping this thread become a great resource for future bkforum members! 
What little I know about nonconsumer CH7 BK:
Quotes from other parts of bkforum:
Info from the Internal Revenue Manual regarding nonconsumer CH7:
From Nick Thompson's "Tactical Bankruptcy Manual":
What little I know about nonconsumer CH7 BK:
- Your debt must be 50% or more nonconsumer debt (business related, not personal consumer debt)
- Taxes owed are considered nonconsumer debt but are not dischargeable (you can file nonconsumer CH7 if your backtaxes owed and other nonconsumer debts = more than 50% of your overall debts; the other debts included in your BK are dischargeable, leaving you with your priority, nondischargeable debts).
- If your debts are primarily nonconsumer, you do not have to pass the means test (but you do have to prove that you cannot afford your debts in schedules I and J). The implication of not taking the means test is that, if you have primarily business debt, your case cannot be presumed abusive (and therefore dismissed) if you are over the median income.
- You shouldn't have to worry about the UST trying to dismiss under 702(b) (presumed abuse) since your debt is not "primarily consumer debt".
- You can make more than the median income for your state and still file nonconsumer CH7.
- The BK court/trustee/lawyers may want you to convert to CH13 if you show disposable income on Schedules I and J (income and expense).
- The BK court/trustee may want to dismiss your case (in what circumstances?)
Quotes from other parts of bkforum:
The only way you can be pushed in a 13 with disposable income is under 707(b). Which only applies in consumer debt cases. The UST could possibly object to your discharge but it would l have to fall under another statute...707(a), which is normally objections for either procedural or fraud agruments. When you fill out your schedules I and J. Just make sure you end up with 0 on your bottom line. If you are a business debtor your chances of the panel or UST trustee objecting are slim to none. I had a $18,000/yr school expense for my 8 year old and never heard a peep. Remember the only section that pushes people into a chapter 13 is 707(b).
source: http://www.bkforum.com/showpost.php?...1&postcount=11
source: http://www.bkforum.com/showpost.php?...1&postcount=11
If you can sidestep 707B with the "business debt" exception, that means you are not automatically disqualified from filing Chapter 7 if you are above the median income. However, if you show disposable income on Schedules I & J (income and expense) on your petition, or some of your expenses are unreasonably high, you can still be pushed into a chapter 13.
source: http://www.bkforum.com/showpost.php?...93&postcount=3
source: http://www.bkforum.com/showpost.php?...93&postcount=3
Everyone has to remember...
The statue that can push you to a Chapter 13 if you have excess disposable income is only under section 707(b).
If you are a business bk. That entire section of the bankruptcy code will not apply to you. Meaning your BK cannot be dissmissed for 'abuse' under the bk code. For the trustee to dismiss your bk they will have to dismiss it under section 707(a) most likely. These dismissals are usually strictly procedural or 'blantant' fraud. Hiding assets, etc.
And courts are 'very' reluctant to dismiss or apply 707(a) to some sort of means test, in fact some districts have basically stated that 'ability to repay' is almost exclusively reserved for 707(b) agruments.
I wouldn't worry at all about any disposable income unless your talking $1000s. But to keep yourself safe just increase your expenses. Remember you don't have to follow guidelines for set expenses. Those set guidelines are reserved for debtors that have to follow 707(b).
source: http://www.bkforum.com/showpost.php?...0&postcount=20
The statue that can push you to a Chapter 13 if you have excess disposable income is only under section 707(b).
If you are a business bk. That entire section of the bankruptcy code will not apply to you. Meaning your BK cannot be dissmissed for 'abuse' under the bk code. For the trustee to dismiss your bk they will have to dismiss it under section 707(a) most likely. These dismissals are usually strictly procedural or 'blantant' fraud. Hiding assets, etc.
And courts are 'very' reluctant to dismiss or apply 707(a) to some sort of means test, in fact some districts have basically stated that 'ability to repay' is almost exclusively reserved for 707(b) agruments.
I wouldn't worry at all about any disposable income unless your talking $1000s. But to keep yourself safe just increase your expenses. Remember you don't have to follow guidelines for set expenses. Those set guidelines are reserved for debtors that have to follow 707(b).
source: http://www.bkforum.com/showpost.php?...0&postcount=20
The thing is...once you can classify your bk has a business bk, it is actually much easier and less stressful.
You don't have to worry about all of those sections that deal with means testing, disposable income, etc.
Just imagine doing a Chapter 13 and not being told what you can spend on expenses. You can set your own expenses and ultimately set your own payment amount.
source: http://www.bkforum.com/showpost.php?...4&postcount=21
You don't have to worry about all of those sections that deal with means testing, disposable income, etc.
Just imagine doing a Chapter 13 and not being told what you can spend on expenses. You can set your own expenses and ultimately set your own payment amount.
source: http://www.bkforum.com/showpost.php?...4&postcount=21
You're not subject to guidelines when making your schedules so you can have other expenses and not subject to IRS liimits. So increase things so that there isn't any excess. Even though they can't dismiss under 707(b) they can make things interesting under 707(a).
source: http://www.bkforum.com/showpost.php?...73&postcount=3
source: http://www.bkforum.com/showpost.php?...73&postcount=3
Basically a court of appeals ruled that your lifestyle can't be considered in a bad faith dismissal, 707(a).
Basically don't worry about extra expenses because they won't be looked at too hard in a non-consumer case.
source: http://www.bkforum.com/showpost.php?...2&postcount=11
Basically don't worry about extra expenses because they won't be looked at too hard in a non-consumer case.
source: http://www.bkforum.com/showpost.php?...2&postcount=11
Here are two excellent webpages that deal with businesses that are considering filing Ch 7 -
http://www.************************/...ease/#more-690
source: http://www.bkforum.com/showpost.php?...33&postcount=2
http://www.************************/...ease/#more-690
source: http://www.bkforum.com/showpost.php?...33&postcount=2
Initial Review of Business Chapter 7 Asset Cases. With the exception of reviewing for adequate protection, the initial review for Chapter 11 BMF cases outlined in IRM 5.9.8.4,Initial Case Review for Chapter 11, should be followed for BMF Chapter 7 Asset cases. Insolvency specialists or advisor must conduct an initial case review within 10 work days of the case's being assigned to them. Elements of this review may be required sooner, for example, to resolve stay violations or to respond to pending motions or defensive litigation. All actions taken and findings in the review must be documented in the AIS history.
source: http://www.irs.gov/irm/part5/ch09s06.html
source: http://www.irs.gov/irm/part5/ch09s06.html
IF THE MAJORITY OF YOUR DEBTS ARE BUSINESS DEBTS OR YOUR DEBT IS ABOVE THE MAXIMUM LEVEL FOR A CHAPTER 13 (1.250.000 IN 2007) YOU SKIP THE MEANS TEST AND YOU AUTOMATICALLY QUALIFY FOR A CHAPTER 7 BANKRUPTCY.
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