Is interest from business credit cards an allowable expense on Means Test?

[psears123]

Hello,

I was wondering if the interest I've been paying on all my past due business credit cards for the last 6 months is an allowable "reasonable and ordinary business expense" on the Means Test and/or Schedule J? These cards are what I am looking to get discharged, so would that make a difference?

I'm going to be shooting to have the Means Test waived since greater than 51% of my debt is business related, but it would still be nice to show the court...

If allowed, these interest costs would make a HUGE difference in my DMI calculations.

Thanks!

[despritfreya]

If more than 50% of your total debts (including all secured debt such as your mortgage and auto) is "non-consumer" why are you struggling over means testing? It simply does not apply.

And, in answer to your question, "no", the debt you are discharging (other than secured debt) is not part of means testing.

Des.

[psears123]

Thanks for the reply.
If I have a ton of disposable income after working up the schedule I & J, I'll still have to avoid an abuse objection, even if I don't have to take the means test. Won't I?

[tcreegan]

Hi psears,

If I have a ton of disposable income after working up the schedule I & J, I'll still have to avoid an abuse objection, even if I don't have to take the means test. Won't I?

They will try to convert you to a Ch 13 Might look at that as the back-up plan...

Tom in Colo

[despritfreya]

Thanks for the reply.
If I have a ton of disposable income after working up the schedule I & J, I'll still have to avoid an abuse objection, even if I don't have to take the means test. Won't I?

Not if you are a "non consumer" case. 707(b) does not apply if you are not "an individual whose debts are primarily consumer debts". I had a case where my client had $4,000.00/month left over when formulating I and J. No problem since he was a "non-consumer" filing.

Des.

[psears123]

Your client was still able to get a Ch 7 through the courts? Nice! You just made my day. Are you an attorney? Which bankruptcy district was this in? I would love to be able to see the case law on this.

[despritfreya]

Your client was still able to get a Ch 7 through the courts? Nice! You just made my day. Are you an attorney? Which bankruptcy district was this in? I would love to be able to see the case law on this.

Don't know about the case law. . . just read the Code. 707(b) ONLY applies in consumer cases - end of story.