Expert: Terry Leeders - 2/28/2009

Question
Can you direct me to a good source to help us with a non consumer chapter 7? We have very little consumer debt compared to the non consumer judgments just passed down on us from a personal guarantee from our now defunct business. Also, I just received an unexpected bonus of $10,000. If we can do a non consumer, my income is not used but we have 6 kids and I have to fix our A/C...can I spend this money for personal needs for basic needs such as shoes, clothing, braces? I really need some help. We live in Minnesota. Thank-you.

Answer
The means test does not apply if the debts are not primarily consumer.  The court will then look at monthly income and expenses instead.  If you have a large income before filing, you should spend it down on necessities...and keep track, as the court may ask you about it.  I advise my clients not to pay family or friends any money,period, don't pay debts they want to discharge in most cases, and don't by luxury type items.  Do not pay any creditor over $600 in the 90 days before filing, Except financed items -regular payments ok.
You should speak to a local attorney, as $10,000 is a lot to spend on reasonable and necessary expenses.