Do I qualify?

[njtrucker]

I am getting my self all confused by reading to many different posts. Can any one tell me if i qualify for Chapter 7?

I own a business that will probably be filing Ch 7 in the next month, unless something tremendous happens, and because i have personal debt and personal guarantees i think i have to file personally also.

Here is the basics;

1st mortgage 370,000
HELOC 180,000
Home Value 500,000

Financed car
Unsecured Debt about 200,000

If my company shuts down, i have a job offer already, so if i discharged all my unsecured debt and the HELOC, my monthly budget would be positive by $1500 or so. This would include reaffirming the car and 1st mortgage.

I did one of those median income calculators, and i am below the state average.

I am driving myself crazy on what to do. I have been thinking about filing myself and not with my wife so it didnt affect her credit, but some of hte unsecured debt is in her name, so i am thinking i might as well get rid of it all.

Thanks for any information.

[StartingOver08]

If you file personally, you probably do NOT have to file a business BK at all.
Most of the time your business LOC's and debt are personally guaranteed so filing a personal Ch 7 takes care of your liability. You can then just close the business.

Read here: http://www.moranlaw.net/business-bankruptcy-FAQs.htm

As to whether you are a Ch 7 or a Ch 13, you would need to fill out the Schedules I & J to see if there is any disposable income. There are many threads on making sure you have included all of your expenses so you have a negative disposable income or less than $100 left over. Search the forum for expense examples.

[jessegirl]

Starting over is right - Know one here can tell you if you qualify for a chapter 7 until you fill our schedules I & J and then see if there is any disposable income. Have you spoken to any attorneys yet? If not do so. Most of the times the first meeting is free and at that meeting have them do a means test for you to see if you qualify.

[epiphany]

If you are a sole prop, there is no distinction between your personal and your business finances in the eyes of the BK Court. Your filing will include both your business and personal estates.

So HOW you are doing business really has a huge impact on HOW you should proceed.

ep

[StartingOver08]

Actually sole prop and S- Corp are handled just about the same. I am not sure about a C-Corp. But epiphany is right, you need to clarify with the attorney on the business aspect.

On mine, it was a S-Corp and all the business debt was included too because it was personally guaranteed. The S-Corp was even mentioned as the "Alias Name" in the appropriate area of page one of the petition. I had to close the S-Corp and begin doing business as a sole prop right after filing. (Just a note, the reason I had to close the S-Corp is because the creditors can still get a judgment for the business debt and if I were to continue operating in the S-Corp name and deposit the funds into the S-Corp bank account, those funds would be subject to seizure ANYWAY even though my personal liability was discharged.)

You will want to find out what you need to do with the business after the filing date if you plan to keep operating. You do not want to have business funds subject to seizure by creditors after your personal liability is discharged so find out what your protection will be for the business name and funds.