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bk7 and business income from spouse..means test confustion

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    bk7 and business income from spouse..means test confustion

    Ok, question, my sister is contemplating a CH7, on her own, her credit is shot, she has no job (lost it about ayear ago), no UE benefits, nothing. She owes over 80k. She is married, her husband is the sole proprietor of a used car dealership. She has ZERO interest in the business, is not an employee, etc. She has no ownership either. But she has to list "household" income for the means test...problem is...there is no income. Last year when they filed taxes jointly, their AGI was -77,000, yes negative 77grand. On the schedule C "profit and loss from business" which clearly lists her husband as the Sole Prop...and his SSN only, it shows gross receipts of 353k, and expenses, costs, etc as 410k, it shows a loss of -102k.

    She had 24k of income in 2008, thats it, thats all that she really made.

    How does this affect means testing? She obviously is under means...but I am thinking that the losing business of her husband (he is keeping it) may affect her ch7 case...what do you think?

    She has no money for an attorney, and in MD they won't offer many free consults...

    Since the business had a net loss, there was no "income" from the business, correct? And it doesnt need to be included on the means test..correct?

    #2
    Yes the income does need to be put on the means test.

    Your entire household income is put on the test. She can file alone. Your sisters husband is not the only one that has a negative AGI!!!

    Most attorney's will give the INITIAL consult for free. Your sister sounds like she needs a good attorney. She will need to find one that is familiar with her type of situation. It is true that an attorney will not give continued free consults, they expect you to make a decision regarding their services sometime after the initial consultation.
    Filed CH 7 9/30/2008
    Discharged Jan 5, 2009! Closed Jan 18, 2009

    I am not an attorney. None of my advice is legal advice in any way..

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      #3
      I understand that income must be reported, but what if there is no "income", husband does not draw salary b/c business is running at a loss...so on the schedule "J" line 7 "regular income from operation of business" a zero can be put...because the business in husbands name is running at a loss...correct?

      Comment

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