What happens if a person loses their job while in a Chapter 13?

[tmaire]

Anyone have this happen.

Could they convert to a Chapter 7 right away or would they have to wait until the previous 6 months average income is below the median?

Thanks for any experience.
T.

[lrprn]

Anyone have this happen. Could they convert to a Chapter 7 right away or would they have to wait until the previous 6 months average income is below the median?

Unfortunately losing a job along with other big financial problems such as a major illness/hospitalization or divorce during Ch 13 do happen all too often. These are the major contributors to the 70% Ch 13 failure-to-successfully-complete statistics .

Whether you can convert to Ch 7 and when depends on several factors - if you filed with your spouse and how much income that spouse has compared to the median income in your state, what assets with payments in arrears that were included in your Ch 13 and if you still want to keep those assets, and if you previously converted your case before now.

Here's a good explanation by a bankruptcy lawyer about converting Ch 13 to Ch 7 - http://www.************************/...o-a-chapter-7/

[tmaire]

Whether you can convert to Ch 7 and when depends on several factors - if you filed with your spouse and how much income that spouse has compared to the median income in your state, what assets with payments in arrears that were included in your Ch 13 and if you still want to keep those assets, and if you previously converted your case before now.

[lrprn]

If you are going to lose your job soon, contact your lawyer and explain your changing circumstances. See what he/she suggests, including how quickly your 13 can be converted to a 7 once your job is truly lost.

If this situation is just a "what if", now you know that given the circumstances you've described here, it's likely that if you ever do lose your job, your lawyer can convert your Ch 13 case to Ch 7. You will pay extra for the conversion, but all your unsecured debts will be gone - a fair trade

[tmaire]

If this situation is just a "what if", now you know that given the circumstances you've described here, it's likely that if you ever do lose your job, your lawyer can convert your Ch 13 case to Ch 7. You will pay extra for the conversion, but all your unsecured debts will be gone - a fair trade

[EveryDayAdam]

if you are below the median, and have no secured debts, then why did you do a 13? You have an hands down chapter 7. I'd go ahead and try to convert anyway. As long as the attorney's fees and priority debts are paid, you shouldn't have any problem.

[CATCHMEIFYOUCAN]

I had TWO Full Time jobs. So it put me in a Ch13. I quit one job after paying 3 months into the chapter. I converted to Ch7, it seemed like it happened overnight. At the new 341 meeting, the Trustee asked why I was converting, and I replied, "I don't think I can handle working 80hrs a week the rest of my life!" He smiled, and said "ahhh, good reason!"

The law does not require you too work 2 jobs let alone one, but if you only have one job I would have a very valid reason why you cannot work if you are just quitting to file for Ch7.

Best of Luck, CMIYC

[tmaire]

if you are below the median, and have no secured debts, then why did you do a 13? You have an hands down chapter 7. I'd go ahead and try to convert anyway. As long as the attorney's fees and priority debts are paid, you shouldn't have any problem.

I had TWO Full Time jobs. So it put me in a Ch13. I quit one job after paying 3 months into the chapter. I converted to Ch7, it seemed like it happened overnight. At the new 341 meeting, the Trustee asked why I was converting, and I replied, "I don't think I can handle working 80hrs a week the rest of my life!" He smiled, and said "ahhh, good reason!"

The law does not require you too work 2 jobs let alone one, but if you only have one job I would have a very valid reason why you cannot work if you are just quitting to file for Ch7.

Best of Luck, CMIYC.

I am not voluntarily giving up my employment.

CMIYC ,
So are you saying that when you quit your second job you just told the trustee that as of now your income had decreased? You did not have to wait until your income from the previous six months was below the median? I hope I am not making this more complex than it has to be but if the company closes at the end of the year I will not have the income to make my payments for six months until our income falls below the median. Does this make sense?

I really appreciate all of your responses. It is good to be able to hear from people that have BTDT.
T.