Large expense on credit card

[jenbow]

see below

[jenbow]

Thanks for your advice everyone.. I really apprectiate it. It appears we have to wait the 6 months.. I dont have a problem with waiting its more about what to do with my husband. If he gets a job, we will exceed the means test and fail a chapter 7. We do not qaulify for chapter 13 as we have above $336,000 unsecured debt.

Does anyone know about the whole primary non consumer debt clause that states we do not have to pass the means test?? I thought I remember reading if our debt was more than 50% business debt, the means test does not apply. If this is true, then my husband can get a job and we can wait 6 months to file.. any thoughts?

[keptdigging]

Yep, you're right on the more than 50% business debt... if so you don't have to pass the means test. You'd still need to not have disposable income when measured on schedules I & J, but those are based on actual (as long as their reasonable to the judge) expenses, not the means test formula.

In fact, the schedule I-J thing is likely your biggest problem. The means test is a mechanical look back so if you only have a couple of months of income it gets diluted when averaged with other months without income. But current income/expenses, forward looking, is an issue not only when you file but likely up until your 341 meeting (the trustee is likely to ask, "Has their been any material change in your financial circumstances?") In fact some say it's a potential issue until your case closes, but after the 341, you're unlikely to be asked about it again.

A lot of people with business debt fail the 50% business debt test because the mortgage on their home counts as consumer debt.

I've also seen a lot of advice about that here which doesn't conform with my personal research.

My own filing is just a couple of days off and is largely driven by debt I took on trying to build a business. For my own situation I decided everything was subordinate to getting to a chapter 7.

If you don't qualify for a Chapter 13, you're looking at a consumer chapter 11. Most attorneys don't really understand them. The one thing I know is that they're expensive ($10K and up for attorney's fees) and similar to a 13 in that you are paying creditors over time. Expensive enough that I'd take my chances on settling with Chase as cheaper than rather than risk not qualifying for a 7.

But you're clearly in "need an experienced local lawyer" territory. This is stuff that's not going to be the same district to district.

[jenbow]

thanks for your post just digging. I have reviewed our debt closely today and we fail the business debt.. you are correct, our mortgage throws me to a 60% personal and 40% business.

I keep getting mixed advice on if my husband can find a job after filing or after 341. My attorney has been out of town so I am unable to speak to him and for some reason I have 1,000 questions this week.

This whole thing is a nightmare. I wish I can wake up soon. : )

[catleg]

If you have cash to settle some debts it might pay to settle the consumer debts to throw the balance of non-consumer/consumer more in your favor.

Also if you pay Chase the 6700 balance then immediately file BK they have no basis for an AP yet will have to cough up the money as a preferential payment.

Quite possibly to you , if you can cover it with an exemption.

Meanwhile there is little to be gained by rushing, as carpenters say measure twice, but cut once.