non comsumer debt

[bigtim6656]

I read somewhere that you do not do the means test if the majority of you debt is non consumer is that right? What is non consumer and how much is a majority 51% or 75% or what ever.

[wnguyen]

This is what I understand about non-consumer debt. From the word non-consume I think non-consumer debt is debt for items that aren't meant to be used up and worn out. Those can be mortgages, student loans, and back taxes. While mortgages and student loans can be understandably viewed as lifetime investments, I have hard time understanding why back taxes are considered non-consumer debts.

[tobee43]

"non consumer debt refers is any debt incurred on items meant to be lifetime investments. The primary items that fall under the category of non consumer debt are mortgage loans, student loans and back taxes."

[daylate]

I think non consumer debt is debt you have incurred in a business-I think mortgage debt is consumer debt-otherwise I don't think many people would qualify for a 7-think about it mortgages usually are 100k and up;other debt most likely lower.

[SMinGA]

non-consumer is business related debt

majority = greater than 50%

[tcreegan]

consumer vs non-consumer debt

Hi all,

The BK code is not very helpful in determining consumer vs non-consumer debt, the wording is kinda vague. So you go to court cases.....

Courts have consistently held that taxes, even income taxes, are non-consumer debt

Rental homes, investment houses, are non-consumer but your primary residence is consumer. See http://www1.ncmb.uscourts.gov/opinio...s/Woodward.pdf

Court cases on student loans is mixed. In the tenth circuit the part of student loans for food, housing, personal needs is consumer. By default the part of the loan that paid for tuition, univ. fees, books, etc is non-consumer.
see http://www.justice.gov/ust/eo/public...ei-article.htm

Hope this helps,

Tom in Colo

[tobee43]

non-consumer is business related debt

honest indian....it's what i said above...


"non consumer debt refers is any debt incurred on items meant to be lifetime investments. The primary items that fall under the category of non consumer debt are mortgage loans, student loans and back taxes."

[bigtim6656]

so if your debt is business related and not consumer debt does that mean you can not file chapter 7

[tobee43]

no...did you have subchapter 2 corp???? sole prop??? llc?????


of course you can list all of these on your chapter 7...however you would have to bankrupt the business seperately in most states. it would be two different bankrupcy's one for the business and one personal.

[bigtim6656]

sole prop, if it had been a llc or corp I would not be filing myself. I knew when we did the sole it would bite me. I did not expect it to go under like most of us who had business fail.

no...did you have subchapter 2 corp???? sole prop??? llc?????


of course you can list all of these on your chapter 7...however you would have to bankrupt the business seperately in most states. it would be two different bankrupcy's one for the business and one personal.

[tobee43]

sole prop, if it had been a llc or corp I would not be filing myself. I knew when we did the sole it would bite me. I did not expect it to go under like most of us who had business fail.

of course...hindsight is of 20/20....getting over that into help mod....

ok...this will depend on how you did your taxes....you may have to file twice with the courts...if not, your atty should advise you that you can conbine the debt, as, you assumed it yourself. did you list the business on your personal tax returns???

[bigtim6656]

All of the debt is on my credit, i never got to file taxes. The first year was rather short and I kind of skipped it, well I skipped it not kind of By the end of the second year it went down hill and I did not file. In may of of the third year after I closed I got a letter from the IRS asking WHAT I WAS THINKING, I called told them the business did not make any money and went under. She said they would send me alittle and to write it in and send it back I did so and got a bill for 500 bucks had me worried since I did 10 to 50k a month in sales in the spring in summer(jetski business) so I deal with the 500 bucks. After not paying the tax bill they put a lien on my credit. My lawyer never said there was a issue or having to deal with doing anything split though.

Also do I have to pay the tax lien before I file or get discharged or can I do it after?

of course...hindsight is of 20/20....getting over that into help mod....

ok...this will depend on how you did your taxes....you may have to file twice with the courts...if not, your atty should advise you that you can conbine the debt, as, you assumed it yourself. did you list the business on your personal tax returns???