Means test issues in a CH 7 due to clients handling of th=
Posted: Mon May 03, 2010 8:53 am
You described CMI income and capital contributions (which are not CMI reductions). Check the tax returns and discuss withCPA.Debtors with small business oftenmischaracterize how funds pass to and from entity.
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11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647
Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462
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To: cdcbaa@yahoogroups.com
Sent: Mon, May 3, 2010 8:45:11 AM
Subject: [cdcbaa] Means test issues in a CH 7 due to clients handling of their corporation.
Married Joint debtors own 100% of an S Corp. They had a business that was failing. The wife worked for the business and paid herself a salary. I believe she did this to make her wages a priority claim in the event the business shutdown. The husband had a day job.
Almost all of her wages were invested back into the business so basically she made nothing from the corporation though on paper, because of her salary, she shows enough wages that combined with the husbands salary causes them to fail the means test.
The business has now been shut down. Is there anyway to factor the business losses into the means test? Or should I file the means test as "presumption arises" and try to rebut the presumption?
Now that the business is gone they really don't have the income (because she was using it to prop up a failing business they really never did have the income) and delaying the filing is not an option.
Any advice is appreciated.
Shawn White
You described CMI income and capital contributions (which are not CMI reductions). Check the tax returns and discuss with CPA. Debtors with small business often mischaracterize how funds pass to and from entity. Peter M. Lively, JD/MBALaw Office of Peter M. Lively * Personal Financial Law Center I11268 Washington Blvd, Suite 203, Culver City, CA 90230-4647Telephone: (310)391-2400 * (800)307-3328 * Fax: (310)391-2462 A-Bankruptcy-Attorney.comPersonal Financial Law Center II - Costa Mesa, CA
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY E-MAIL OR BY TELEPHONE. THANK YOU.
From: shawnswhite <shawn@cabankrupt.com>To: cdcbaa@yahoogroups.comSent: Mon, May 3, 2010 8:45:11 AMSubject: [cdcbaa] Means test issues in a CH 7 due to clients handling of their corporation.
Married Joint debtors own 100% of an S Corp. They had a business that was failing. The wife worked for the business and paid herself a salary. I believe she did this to make her wages a priority claim in the event the business shutdown. The husband had a day job.Almost all of her wages were invested back into the business so basically she made nothing from the corporation though on paper, because of her salary, she shows enough wages that combined with the husbands salary causes them to fail the means test.The business has now been shut down. Is there anyway to factor the business losses into the means test? Or should I file the means test as "presumption arises" and try to rebut the presumption?Now that the business is gone they really don't have the income (because she was using it to prop up a failing business they really never did have the income) and delaying the filing is not an option.Any advice is
appreciated.Shawn White
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