Means test required if debt is primarily taxes?

[tdawg]

I have heard that if your unsecured debt is not primarily consumer debt that the means test is not required. I'm trying to find out if this is true. My unsecured debt is primarily federal income taxes from 1999 to 2001 when I had my own business. That is 75% of my unsecured debt. Now, if my mortgage is included, then my mortgage is the primary debt.

Anyone know about this?

[justbroke]

There is much caselaw around this and the majority view is that FEDERAL INCOME taxes are not consumer debt.

Don't get the "means test" confused with the ability to receive a discharge in a Chapter 7. It still goes by your income less your expenses... which produces your disposable income. If your disposable income is $109.58 to $182.50, the presumption of abuse arises. If it's above $182.50, you do not qualify to receive relief under a Chapter 7.

If your mortgage is your primary debt, then I guess you still take the means test.

[biotechsolution]

income tax debt is not considered 'consumer debt'. But your mortgage is 'consumer' debt. When figuring out if your percentage of debt you must include all debt: home, car, etc.

The advantage of being non-consumer is you only use the your schedules I and J for your calculations for your ability to payback for disposable income.

It takes away all objections under 707(b), which only applies to 'consumer' debt cases. It makes the trustee work much harder to object to your expenses.