Chapter 13 to a Chapter 7 Nonconsumer

[justbroke]

Convert like I did. I found that a Chapter 13 was not in my best interests, but it took me 20 months into the plan, to realize that! I had qualified for Chapter 7 to being with (DMI on "paper" was $60/month), so my back-door Chapter 7 was off to a rocky start. I realized that I didn't want to save my investment property after all. Especially since it was empty shortly after filing and stayed empty until after confirmation (6 months later).

[jamesd271]

I am going to convert. The one creditor that is the mian cause for this is a judgement for a commercial lease. This guy is challenging everything so I might as well get the satisfaction of a discharge!

[angles]

james, in my experience most attorneys don’t really grasp the non consumer aspect. the first attorney I consulted with did not even mention it although he had all the information. our second attorney (assistant to a trustee) had no clue either, but we consulted with him. he became a little confused about our case and asked the trustee a few questions and out it popped that we were a non consumer filer. even when going through the rest of the process the assistant attorney wanted to categorize us as consumer filers (working the DMI numbers, etc). so all this has told me that most attorneys don’t have allot of experience (or exposure) to non consumer filers.

like what biotech posted, the non consumer category is designed to encourage people to start up a businesses. The government wants this because it helps grow the economy.

[jake898]

Can anyone explain if a personal loan from a family member (with 6% simple interest and an ammortization schedule attached)
will be acceptable as 'non-consumer' debt provided the funds were indeed put to use in a small home trading business with intent
or 'motive for profit'?

If so, will the UST only be willing to address the base amount borrowed (40K) or the accumalated amount over several years of
interest accrual (appx. 46k). I need the higher amount to ensure I am safely over the 50% 'non-consumer' mark when a 1st mortgage
and some other consumer debt is factored. Both cars are paid off, but even willing to sacrifce one (or entertain a buy-back post discharge
thru the trustee) to get out of the hole I have dug over a near eight year period. Please advise. Thanks!

[HHM]

Can anyone explain if a personal loan from a family member (with 6% simple interest and an ammortization schedule attached)
will be acceptable as 'non-consumer' debt provided the funds were indeed put to use in a small home trading business with intent
or 'motive for profit'?

If so, will the UST only be willing to address the base amount borrowed (40K) or the accumalated amount over several years of
interest accrual (appx. 46k). I need the higher amount to ensure I am safely over the 50% 'non-consumer' mark when a 1st mortgage
and some other consumer debt is factored. Both cars are paid off, but even willing to sacrifce one (or entertain a buy-back post discharge
thru the trustee) to get out of the hole I have dug over a near eight year period. Please advise. Thanks!

You use the FULL amount of whatever claim the creditors can make against you, so if, on the day of filing, you owe $46,000 because of accumulated interest, that is the amount the creditors has a claim for. As for consumer vs non-consumer, just have your ducks in a row. You will probably need to show where the money went, dollar for dollar.

[justbroke]

Yes, I think that since the loan was not an arm's length transaction, you will probably need to show reasonable documentation to prove that the loan was a business loan.