Payment Plan Not Confirmed - Wife Lost Her Job

[NoPaper]

I am filing bankruptcy without my wife but of course her income is included in our disposable income calculation. She is a 1099 employee and she has been laid off for an unknown amount of time. With her being laid off we would be below the median income for our family size. What can be done at this point? Is it too early to convert to chapter 7 since the past 6 months the income has been steady? I don't know if we will be able to afford out plan payments if she isn't working.

[justbroke]

I don't think it's ever too early to convert. I believe the code just says that it's a right to convert.

HOWEVER, and this is the big point, some Districts require a new Means Test and Schedule I/J. Others simply look to see if you qualified for Chapter 7 when you filed the Chapter 13. The problem is the lookback which will still go back 6 months. This all just means that you need a good strategy and to understand how conversions work in your district.

You may be able to also dismiss and refile but that also has issues. The 6-month lookback will still be there and it may still drive you towards a Chapter 13. But your attorney should be able to say that under a hypothetical Chapter 13 you don't have the money to fund a Chapter 13.

Why is this so complex? Because you appear to be in a Chapter 13 because you "failed" the Means Test and could fund a Chapter 13 at the time you filed.

Is it possible? Yes. Can I give you a firm answer? No. I can't give the answer because it requires specific information about how your District deals with conversions and whether or not you would still "fail" the Means Test.

[NoPaper]

Thank you for your response. Yes, I am chapter 13 because I earned too much income but just barely. We tried to get there with deductions but it just wasn't adding up. I will be contacting my attorney to follow up. I guess there is no hypothetical type situations you can argue while converting without considering a lookback?

[justbroke]

I guess there is no hypothetical type situations you can argue while converting without considering a lookback?

It is dependent on the District. In my District, we only complete a new Schedule I/J for a conversion from Chapter 13 to Chapter 7. We do not need to complete a new Means Test. At least that was the standard 10 years ago for my District.