Debt from Small Business

There are several types and sources of debt which might lead an individual or couple to file for Bankruptcy protection. The list is long but it includes tax debt, medical bills, defaulted auto loans, defaulted student loans and debt which arise from the operation of a small or medium size business. The Bankruptcy Code does have several different rules about how certain types of debts can be Discharged or adjusted. The Bankruptcy Code deals with certain types of debts, for a variety of purposes, differently.

Discharging Debt from a Small Business in Ohio or Kentucky

Understanding the different types of debts and how they are addressed by the Bankruptcy Code takes an educated and seasoned attorney. Steiden Law Offices lawyers can help you identify and understand the various types of debts and how they figure into your case. Understanding the ‘how’ and ‘why’ of these differences helps you sort through the various types of debts and how the Code’s treatment affects your case.

Steiden Law Offices lawyers have 30 years of experience in the Northern Kentucky and Greater Cincinnati Bankruptcy Courts. This experience can be put to work for you and your family. Please call and schedule your free, confidential consultation as soon as possible.

Business Debt vs. Consumer Debt

One of the areas of the Bankruptcy Code where this Business Debt distinction matters is in the Means testing results. If the Means Test results reflects too much disposable income, you will be prevented from filing for Chapter 7. This business or consumer debt distinction is critical to your Chapter 7 case.

The Means Test

The Means Test is a complicated financial calculation where your household income and expenses are analyzed by a Court imposed formula. The result of the Means Test will dictate which Chapter you will be able to file. If your income level exceeds specified amounts for your geographic location you will face a Trustee challenge to your Chapter 7 Discharge.

If the debt you seek to discharge is primarily business debt, and not consumer debt, no Means Test is required. The business debt must be at least 51% of your actual debt. These considerations are very complicated and your Steiden Law Offices attorney can analyze your situation and explain how these matters positively or negatively affect your Bankruptcy Case.

Determining Debt Associated With a Small Business

If you operated or continue to operate a business, this will be the subject of much conversation and questions from your attorney during your initial confidential consultation. You should be prepared to provide actual balances for both of your personal, consumer debt and the business debt which you may be personally liable for.

Thoroughness is a Steiden Law Offices trait. There are no shortcuts to doing things correctly and promptly. You may be asked to provide copies of personal guarantees and other documents to support your position regarding business debt versus a consumer debt. Steiden Law Offices knows that gathering and being able to present competent evidence and records proving your position regarding this business debt issue is important to a successful conclusion in your case.

Consumer Debt

Balances which are due creditors from transactions that were primarily for personal or family expenses or for general household purposes would typically qualify as consumer debts. Typical types of consumer debt are medical bills, personal loans, auto loans, student loans, home mortgages and credit card debt.

Finding the Best Bankruptcy Attorney for Ohio Small Business Debts

If the purchases were for commercial equipment, inventory, business loans where the proceeds were used for business purposes, operating capital, payroll, and for other legitimate and business related expenses, than they are considered to be business debts for Means Test purposes. Steiden Law Offices has had 30 years of legal services in the Northern Kentucky and Greater Cincinnati areas representing members of our communities who operate and work in small businesses.

This experience is invaluable in properly identifying issues for our Clients and giving them the best advice and options under the Bankruptcy Code and State and federal laws. Let our Firm go to work for you and make sure your are properly positioned for your Fresh Start. Call us at today to learn more during a free consultation.