Title: Chapter 7 with high cash flow but high expenses — should I expect issues?
Hey everyone — posting from a throwaway since this is a bit personal. Just looking for general feedback from people who’ve been through this or understand the process.
My spouse and I recently filed Chapter 7. We run a small business, so our income is somewhat variable. Typical months are around $25K–$35K gross, with occasional higher months. I realize that sounds high, but our expenses and business costs are also significant and tend to consume most of it.
Over time we accumulated around $150K in unsecured debt, which ultimately led us to file.
Rough breakdown:
- Mortgage: ~$6,000/month
- Childcare + household help: ~$4,000+/month
- Contractors (business support): ~$2,000–$5,000/month
- Business overhead (software, tools, services, etc.): ~$3,000–$5,000/month
- Food / daily living / Amazon / gas: varies month to month
One thing I want to clarify — we do use credit cards for most purchases, but not as a way to carry debt. We primarily use them for purchase protection and to organize spending, and we treat them more like a pass-through for expenses that are backed by our cash flow. No cash advances or anything like that — just how we’ve structured things.
A few things I’m mainly trying to understand (especially around the 341 meeting):
- For those who’ve been through it, what kinds of questions should I realistically expect in a situation like this?
- Does having high gross income but equally high expenses tend to get extra scrutiny from the trustee?
- Has anyone had a trustee focus on credit card usage like this, even if it’s mostly normal living and business expenses?
Also curious more generally:
- For the mortgage — if we don’t reaffirm but stay current, are there any long-term downsides?
Not looking for legal advice, just general experiences or insight from people who’ve been in similar situations.
Thanks in advance.