Does everyone have to take the means test?

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How do you know if you have to take it or not?

[lrprn]

How do you know if you have to take it or not?

If your debt is more than 50% business-related, then you don't have to take the Means Test.

Otherwise, everyone else starts the Means Test and progresses through it until results show you either need to continue or can stop at that point.

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Sorry, I'm dumb when it comes to that....do you mean if I owned a business and that's what it went to then I don't have to take a means test? Thanks...

[HHM]

Sorry, I'm dumb when it comes to that....do you mean if I owned a business and that's what it went to then I don't have to take a means test? Thanks...

Not quite, if you used personal credit cards for business purposes, that doesn't really count as business debt. Business debt is "direct business debt", i.e. mortgages on investment properties, business loans and lines of credit, SBA loans, etc. Note, business debt does not mean you had to have a "corporation" or "LLC", but the debt had to be taken out such that the "lender" knew it was for business a business purpose.

But keep in mind, we are talking about 50% of your total debt, both secured and unsecured. For most people, their mortgage makes it fairly hard to have over 50% business debt if the business was a small side venture.

[Boscoe]

HHM - Gotta disagree here, especially since this is exactly what I did in my case. The definition of "business debt" is was the debt incurred in the operations of the business, and doesn't care whether you used a "business" account or the Citibank Mastercard in your pocket.

Where it can get tricky is if you commingle personal and business, which I did not do.

A "business" is an activity that you do as either primary or supplemental means of earning income. In my case, I invested in pricey Florida real estate. When the boom went bust, I had some serious upside down action, which is how I got to be >50% non-consumer debt. I believe UofAGuy is in the same situation.

So to answer the question: Yes, if >50% of your debt (and this includes everything, including personal mtg, loans, cc's etc.) is business, than no means test is required and you well could qualif for a chapter 7 and get all of this done in about 4 months.

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I did have a home transcribing business that went bust, but it wasn't very much to get into...not nearly 50%. Enough wages lost though that it got us into this mess, but not because I invested so much....just rollercoasted from there after work shortage with the company I contracted with and inability to find more work after that. Thanks for helping me understand that better though.

[HHM]

HHM - Gotta disagree here, especially since this is exactly what I did in my case. The definition of "business debt" is was the debt incurred in the operations of the business, and doesn't care whether you used a "business" account or the Citibank Mastercard in your pocket.

Where it can get tricky is if you commingle personal and business, which I did not do.

A "business" is an activity that you do as either primary or supplemental means of earning income. In my case, I invested in pricey Florida real estate. When the boom went bust, I had some serious upside down action, which is how I got to be >50% non-consumer debt. I believe UofAGuy is in the same situation.

So to answer the question: Yes, if >50% of your debt (and this includes everything, including personal mtg, loans, cc's etc.) is business, than no means test is required and you well could qualif for a chapter 7 and get all of this done in about 4 months.

I don't think what I said and what you said is at odds.

Because of the comingling issue, most trustees will challenge the use of personal credit cards in a business context.

[southernbelle]

Quick question Boscoe. Did you have assets?