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Consumer v. non-consumer debt
I would agree with the t'ee on this one. Non consumer debt is debt that you
do not voluntarily incur, like taxes. However, I would list the debt as
business debt. Investment property is definitely a business. The result is the
same, no means test.
Michael R. Totaro J.D., L.LM.
Totaro & Shanahan
P.O. Box 789
Pacific Palisades, CA 90272
310 573 0276 (v) 310 496 1260 (f)
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Raj,
I've done the same thing as you without incident. I would recommend researching cases that interpret the 101(8) definition of "consumer debt", which is a debt "incurred by an individual primarily for a personal, family, or household purpose." If one expands this too far, it could include businesses (remember, the opposite of consumer is NON-consumer; NOT necessarily Business). So the possible consequence of an overbroad interpretation is that debt incurred to finance the family business (e.g. self-employed) could also be considered consumer debt because it was incurred to support the family.
I'm not sure how far courts have gone in interpreting this, but that's where I'd start my research.
This would be a good one to do an article on for our group.
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web: http://www.bklaw.com/
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----- Original Message -----
To: cdcbaa@yahoogroups.com
Sent: Monday, February 04, 2008 4:03 PM
Subject: [cdcbaa] Consumer v. non-consumer debt
I've filed several cases now where a client has multiple pieces of
rental and/or investment properties and the secured liabilities on
all of those properties far exceed the secured liability on a
residence, car loans and unsecured debt. In those cases, I've made
the assertion that the means test does not apply b/c the debts are
primarily non-consumer and the UST's office has left me alone.
However, in a recent case I filed w/similar fact pattern, the UST in
Riverside and the ch 7 tee want me to amend Form 22A b/c they don't
believe debt incurred to purchase a rental/investment properties are
non-consumer debt. Does anyone have any authority I can point them
to. The UST in LA/WH have never done anything with this fact
pattern.
Thanks in advance.
Raj T. Wadhwani
Wadhwani Law Firm, APLC
15233 Ventura Blvd., Suite 1120
Sherman Oaks, CA 91403
Phone: (818) 784-0500
Fax: (818) 784-0508
raj@wadhwanilaw.com
#ygrp-mkp {
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I've filed several cases now where a client has multiple pieces of
rental and/or investment properties and the secured liabilities on
all of those properties far exceed the secured liability on a
residence, car loans and unsecured debt. In those cases, I've made
the assertion that the means test does not apply b/c the debts are
primarily non-consumer and the UST's office has left me alone.
However, in a recent case I filed w/similar fact pattern, the UST in
Riverside and the ch 7 tee want me to amend Form 22A b/c they don't
believe debt incurred to purchase a rental/investment properties are
non-consumer debt. Does anyone have any authority I can point them
to. The UST in LA/WH have never done anything with this fact
pattern.
Thanks in advance.
Raj T. Wadhwani
Wadhwani Law Firm, APLC
15233 Ventura Blvd., Suite 1120
Sherman Oaks, CA 91403
Phone: (818) 784-0500
Fax: (818) 784-0508
raj@wadhwanilaw.com
I've filed several cases now where a client has multiple pieces of rental and/or investment properties and the secured liabilities on all of those properties far exceed the secured liability on a residence, car loans and unsecured debt. In those cases, I've made the assertion that the means test does not apply b/c the debts are primarily non-consumer and the UST's office has left me alone.
However, in a recent case I filed w/similar fact pattern, the UST in Riverside and the ch 7 tee want me to amend Form 22A b/c they don't believe debt incurred to purchase a rental/investment properties are non-consumer debt. Does anyone have any authority I can point them to. The UST in LA/WH have never done anything with this fact pattern.
Thanks in advance.
Raj T. WadhwaniWadhwani Law Firm, APLC15233 Ventura Blvd., Suite 1120Sherman Oaks, CA 91403Phone: (818) 784-0500Fax: (818) 784-0508raj@wadhwanilaw.com
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