Business but not a DBA or INC

[Geeznowwhat]

I promised to ask this question here. I do not know what to reply to my friend.

She has a business (just doing this out of a property she rented in her own name). She cares for horses.
Her income is pretty good....but the expense of taking care of the horses eats up all her available money. She cannot pay the credit cards and the rent and basic living expenses plus the expenses of the horses. So the CC and other unsecured debt have just piled up.

I cannot tell her how to fill out the expense form on a chapter 7. Horses feed, vets, furriers, hay, etc doesn't fit anywhere. Also, what allowance does she get for these expenses....

What happens in the means test? Horses expenses are probably not considered there. Yet, no horses, no income.

I don't know if she is even allowed to file chapter 7.

What do I tell her?

[LadyInTheRed]

Line 5 of Form b122a is where your friend will put her last 6 months Gross receipts from business and subtract her ordinary and necessary business operating expenses to arrive at her net monthly business income that will be used on the means test. On Schedule I, she will put her net business income and attach the statement showing the details.

The fact that she is self employed will not prevent her from filing Chap 7. In fact, if most of her debt is business debt, a Chap 7 is easier because somebody with mostly business debt does not have to pass the means test to get a Chap 7 discharge.

What you should tell your friend is to find a good attorney. Somebody with a business should not try to file prose. Too much can go wrong.

Also, tell her to join BKforum so she can ask questions herself and avoid the confusion that can occur when communicating through an intermediary.

(The term to describe your friend's business is a sole proprietorship.)