Question about means test

[jjukem]

Hello, my wife and I considering filing for BK. We don't really want to do ch 13 and would prefer ch 7. As this is new to us and somewhat complicated, I have a few questions I was hoping someone could help me with.

A little about our situation:

1. I own my own video production company. Sole Prop.
2. We make (barely) OVER the amount for the means test for ch 7 when looking at our GROSS income.

My questions:

1. Since I own my own business, I have quite a few related expenses. Example, I just did a gig for $20,000 but will only net about $2500. The expenses are independent contractor fees, equipment rentals, etc. Can I deduct these expenses from our means test?

2. Are there other expenses we can deduct from the means test, (auto, insurance, rent, phones, etc.)

3. If any expenses can be deducted, can they be both business and personal? If not, which one?

I hope this is clear. Thank you in advance.

[OhioFiler]

Your business income is your net not your gross.

Are most of your debts business or consumer related? If your debts are primarily business related you don't need to qualify under the means test.

[DeadManCrawling]

I think I understand what you are asking. I also run my own company, from my home in my case. Not sure if you have offices or storage facilities.

We have many expenses that are paid by business checks, to avoid taxes on them legally.

Our attorney says we will be taking our net as the working number, though the business expenses will be accounted for as well. This can get a little tricky, as you have to determine what YOUR salary is and the expenses are both a positive for the means test and a negative for income purposes.

Essentially, he told us to use only the net income, but to use the company expenses as a cost as well. We receive no real benefit for say phone service, but we must pay it as an expense. Those things, for us, are being counted as expenses (we have to meet the obligation every month) but are not being called income since that money never reaches us personally and is paid with business funds, pre-tax.

Hope that helps, and your attorney may well advise differently.

We are in FL middle district.

[2manybills]

Question: Is most of your debt business debt?

[jjukem]

Hi and thanks for your replies.

We are leaving our condo which is the majority of our debt and then we have a decent amount of credit card debt (around 30K) and the majority of that is business related.

My attorney advised that I file in six months and kind of watch my income during that period. He did not seem to mention anything about not worrying because the debt is business debt.

Does this sound like a good way to go?

[jjukem]

Anyone? Bump... (thanks)