Do not qualify for Chapter 13 or chapter 7

[jenbow]

Hello..

So my husband and I fail chapter 13 because we exceed $336,00 in unsecured debt.

We might fail the means test in chapter 7 because of income.. it is going to be close. We have basically 60% consumer debt and 40% non consumer debt (approximately $800,000).

Does this force us into a chapter 11?

Thank you,

Jen

[despritfreya]

In response to:

"So my husband and I fail chapter 13 because we exceed $336,00 in unsecured debt."

That's interesting since the unsecured debt limit is now just over $360,000.00. Are you above the current debt limit?

[despritfreya]

If you are over the limits and simply do not qualify for a 7, then yes, the 11 is the only choice if you want to file a bk. HOWEVER, so long as you retain an attorney who is comfortable with individual 11's you should be fine. We operate them just like a 13 with the only major difference being the ability of creditors to vote depending upon certain factors.

In an 11 you are the Trustee and, with the exception of "adequate protection" payments to secured creditors (usually mortgage and car payments), you will not begin making disbursements to creditors until the Plan is Confirmed. The 11 is rather complicated and has a lot more paper shuffling for the debtor (filing operating reports, opening and using a DIP account, making sure the UST is listed on all personal and real property insurance policies etc.) but once you get use to it, it's no big deal.

[catleg]

I think if you have high income and high secured debts, then a chapter 11 is best for you. It allows your plan to direct funds to secured debts and pay minimum to unsecureds.

[jenbow]

Pretty much all our debt is unsecured.. business taxes (payroll and sales), student loans, 2nd mortgage (no equity), and credit card.

I am going to sit down with our attorney soon and go everything with a fine tooth comb to see where we are at.. we are in a rock and a hard place. I really want to stay away from a chapter 11 b/c I hear it costs like $15,000 just to get started. We are so broke we could never pay this.

I think we just have to keep my husband unemployed until we file.. he is shutting down his business within 4 weeks. He had a job interview with a company yesterday and they seem so interested. I am afraid if we tell him he cannot start until Jan 1, they will not make an offer. But it is what it is..

If my husband does not bring in any income or less than $1,500 per month, then we will pass the means test.

We have to wait at least four months because of a stupid charge I made to try and bail our company. I borrowed from Peter to pay Paul thinking we save the company. This charge would most likely be an AP by Chase.. so we have to wait until December 23 at a minimum..

Thanks all for your input