Re: Bankruptcy Means Test

If they were personal credit cards (not credit cards issued in the name of the business), then it's a pretty good bet that it would all be deemed consumer debt.

Determining Income for Bankruptcy Means Test for Deciding Between Chapter 7 and Chapter 13

The "means test" under the bankruptcy code is a way of determining whether debtors have too much income to file chapter 7 and are therefore required to file chapter 13 repayment plans. The "cutoff" point is the state median income for the debtors' family size--those above it are pushed into chapter 13, while those below it can do chapter 7. Secured debt can sometimes come "off the top" and reduce the remaining available income so that the household falls below the median, thereby still permitting a chapter 7. The same applies to exceptional medical or other necessary expense, such as that associated with having a special needs child. If a debtor is totally self employed, debt which is truly business debt can be treated differently--the test would probably be whether or not your Certified Public Accountant allows you to claim it as business debt. I do not have nearly enough information on your specific situation to advise you, but if continuing payments on certain debt service is necessary for the production of your income, the payments on it would possibly be used to reduce income to some extent. The debtors' net income might thereby potentially be reduced, possibly effecting which side of the state median income you end up on.