Difference between business and personal Ch 7

[seacap]

I am going to file Ch 7. But wonder what the difference is between business and personal. My business is a sole proprietor. I don't see what the difference would be since all my business debt was guaranteed by me. I'm a photographer and operated under my name.

Any insights would be helpful.

[despritfreya]

Since you are a sole prop. you did not "guarantee" the debt. The debt is simply your debt, incurred for a business purpose. While we use the phrase “business” bk, in your case you would be filing an individual bk. If more than 50% of ALL of your debt (mortgage, car, taxes, cc, medical, suppliers, etc.) was incurred for “non-consumer” (business) purpose then you do not have to “qualify” for the 7 as “means testing” is not required.

The problem you face is whether or not the assets you use in the business can be exempt. California has 2 exemption tables. Tools of trad are covered under CCP 703.140(b)(6) or CCP 704.060. You would have to review both statutes to determine which one (703's exemptions in general or 704's exemptions in general as you cannot mix the two) best protects you.

Des.