After an hour long initial consultation with a client, he tagged the means test with incredible clarity.
It’s like playing three dimensional chess
Pretty good assessment of the mess Congress made when it “reformed” bankruptcy law.
We were juggling the means test interaction between unfiled tax returns, a business downturn, and payments to an estranged spouse not yet ordered by a court.
- how much was owed to the IRS
- would the voluntary support of an estranged spouse qualify as a means test deduction
- what’s the impact of living with parents on housing deduction
- how would spousal support be treated for the current year’s taxed after the recent tax changes
- is it better to wind down the existing corporation and start over
The client demonstrated further savvy by holding this exploratory meeting with a bankruptcy attorney before there was a crisis.
He had time to make the spousal support officially court ordered. The tax returns would tell us whether there were priority taxes that skew the means test.
We could analyze the choices and just what the means test would mean if he elected Chapter 13.
It felt good to applaud a client.