Chapter 7 - Non-Consumer Business Debt

[hungrywolf01]

Hi all, I've been poking around the forum and am very impressed with the quality of advice being given. Here's my situation, I'm married and looking at filing a Chapter 7 - Non-consumer Bankruptcy based primarily on my guarantee for certain business debts from 2004-2008. The total business debts for which I'm potentially on the hook is above $800k and over 50% of the total debt that I am attempting to discharge. I currently have a judgment lien against my residence and a wage garnishment in place as a result of one of the guarantees. The business shut down in 2008 and doesn't have any assets to satisfy any of the debts.

Probably most importantly, part of the business debt (approximately $150k) is comprised of "trust-fund" payroll taxes that we're not paid by the company to Federal and State agencies back in 2006. I haven't received an assessment from the IRS or notice from the state that they intend to look to me to satisfy the debt, but I suspect it will come immediately after I file. I realize that these are non-dischargeable debts and want to get to a point where I can start paying them off over a period of time (preferably about 10 years).

My wife will not be filing and together we make substantially more than the household median for my state. We have a nice house that we purchased a little over a year ago, but do not live an extravagant lifestyle by any means or otherwise have any other assets.

Like many others, I've been advised that Chapter 7 was not an option because, as a family, we didn't pass the means test irrespective of the nature of the debt. Please...please... please, does anyone have any real world experience with this type on Non-Consumer filing? If so, what was the outcome? In particular, what type and amount of expenses where considered "acceptable" on the schedules? What else do I need to be looking at? As it stands, our schedules so considerable disposable income that, in the real world, just doesn't exist.

Thanks for any input.

Wolfy

[biotechsolution]

Hi all, I've been poking around the forum and am very impressed with the quality of advice being given. Here's my situation, I'm married and looking at filing a Chapter 7 - Non-consumer Bankruptcy based primarily on my guarantee for certain business debts from 2004-2008. The total business debts for which I'm potentially on the hook is above $800k and over 50% of the total debt that I am attempting to discharge. I currently have a judgment lien against my residence and a wage garnishment in place as a result of one of the guarantees. The business shut down in 2008 and doesn't have any assets to satisfy any of the debts.

Probably most importantly, part of the business debt (approximately $150k) is comprised of "trust-fund" payroll taxes that we're not paid by the company to Federal and State agencies back in 2006. I haven't received an assessment from the IRS or notice from the state that they intend to look to me to satisfy the debt, but I suspect it will come immediately after I file. I realize that these are non-dischargeable debts and want to get to a point where I can start paying them off over a period of time (preferably about 10 years).

My wife will not be filing and together we make substantially more than the household median for my state. We have a nice house that we purchased a little over a year ago, but do not live an extravagant lifestyle by any means or otherwise have any other assets.

Like many others, I've been advised that Chapter 7 was not an option because, as a family, we didn't pass the means test irrespective of the nature of the debt. Please...please... please, does anyone have any real world experience with this type on Non-Consumer filing? If so, what was the outcome? In particular, what type and amount of expenses where considered "acceptable" on the schedules? What else do I need to be looking at? As it stands, our schedules so considerable disposable income that, in the real world, just doesn't exist.

Thanks for any input.
Wolfy

If more than 50% is business then the means test won't apply. Now remember it's all debt, not just debt you want to discharge. Home mortgages and car loans need to be factored in.
Since you won't have to worry about the means tests and allowed expenses when you do your schedules make sure they end up at 0 or under.
I had a business bk (a little over 1M) was also over 2X times the income limit.
But I had 20K year school tuition (8 year old) and numerous business expenses. Was never questioned by either the panel or US trustee.

The problem that the UST has is the only objection they have is 707(b) to put you into a Chapter 13 and this wholly relies on 'consumer debt'. This won't work with a 'non-consumer' bankruptcy. The other objection 707(a) and 727 are geared for more fraud objections and bad-faith filings. Has long has you don't have elaborate country club memberships and such you should be okay. But consult with a attorney who specializes in Chapter 11 bk's, that means they do business bk's. I would contact the IRS before you file and get a ballpark figure for your trust fund payments. If possible you even be able to get a potential agreement set-up, you can then use the payment amount on your schedules to reduce you disposable income.

You're right about the taxes not being discharged, especially trust fund taxes.
And the IRS is going to have their own formula to see how much disposable income you have to pay them. Could be tougher than your BK filing.