talked to lawyer yesterday about CH 7 conversion

[woeisme]

Well, in a nutshell, hubby's back problems have him filing for disability, and in the meantime we've lost a big hunk of our income. So after waiting a couple weeks for our lawyer to find the time to talk to us on the phone (yes, had a 2 week wait for a phone conference with her!) she said even tho without his income we'd pass the means test, that she seriously doubts the judge will agree to a conversion because our income was so high before that we were paying off most of our debt. I guess she knows what flies with the trustees/judges here better than I do, but what are we supposed to do while we wait the months to years that it takes to get the disability claim processed (ave waiting period for SSI disability claims are over 600 days, he worked for the state so is going through a different system, but could still take a long time, especially if they decide to fight him on it.) Anyhow, all she would do for us is file paperwork to suspend the payments for 3 months, in the hopes that he'd get approved for disability in the meantime. So I guess now we wait until June to see what happens. So frustrating, but I guess I see the point, the judge will want to see what our income is going to look like then, not want to base it on what is going on right now. I feel like dismissing the 13 and starting over with a 7 (not behind on house and have little to no assets to worry about) while we now pass the means.... but guess I will go along with the lawyer's recommendations for now.

[woeisme]

Just got letter from the CH 13 trustee denying our request for a 3-month suspension of payments. The stupid lawyer said that we were in a 100% plan for less than 60 months, so deferring would still allow us to pay our plan completely in 60 months when she filed the request for suspension. Well, duh, if she'd read our paperwork, she'd see that we are NOT in a 100% plan, and as the trustee pointed out in his denial letter, her proposal would have us paying for 81 months!!! So now I need to call the nitwit and see what she was thinking when she filed this, and whether or not refiling the request will work. VERY FRUSTRATED at the moment...

[liz417]

Hey Woeisme,

Sorry about your situation and to have to wait 2 weeks for a conference call with your attorney? Yikes! I would have your ch 13 dismissed and try again for the ch 7. This is ridiculous! Good Luck and stay on top of your attorney, obviously he has too much on his plate right now.

[EricaCallaha]

Yikes! That sucks that your "nitwit" (I love that by the way) botched that up. Maybe try talking to another lawyer. That person may have a new perspective. That nitwit doesn't seem to really have the time for you and that it dangerous for you right now. I know that may mean more money out of your pocket, but if it gets you what you need it might be worth it in the end. A lot of people over the means qualify for a 7. Just depends on angles.

Good luck.

[woeisme]

oops, duplicate post below

[woeisme]

Well, just talked to the lawyer's assistant. I guess the lawyer filed an amended motion already (checked on PACER to be sure they weren't lying to me!) and it turns out that she had filed the amendment yesterday, maybe I need to modify that nitwit characterization? So now will wait to hear what judge says to this motion to suspend payments based on my real plan.

What was interesting was that in reading the paperwork from PACER, she is still claiming that suspending the payments for 3 months won't change the amount that the unsecured creditors get paid, just that the time in which they get paid will be extended.

My original plan was for 59 months, at $1100 per month, and an unsecured dividend of 65%. Not all my unsecured creditors filed claims, so I assumed I'd still be paying the $1100 per month for 59 months, but that because not all filed, that they'd get paid back a higher percentage, which I calculated to be around 75%. Now it seems as though what she's arguing is that I just am going to pay back my 65% (which I calculate will be done in 51-52 months, give or take depending on trustee fees) and so suspending my payments for 3 months means I'll still be under the 60 month maximum by 5 or 6 months. Now I know my trustee is pretty fair about most things, and has one of the highest success rates for CH 13's in the country, but it never occurred to me that we'd end our CH 13 early unless we were in a 100% plan. So now I'm not sure if that's my lawyer being a dummy again, and she's going to get slapped down yet again once this new paperwork hits the judge's desk, or if my fairly reasonable district allows people out of their plans early once they pay their base, even if it isn't at 100%. We'll see!

In the meantime, I am really hoping the 3 month suspension goes through, because that will give us 3 more months for our income to be below the mean, just in case we have to dismiss the CH 13 and file a CH 7 if the lawyer is correct and a conversion isn't possible. If we dismiss rather than convert, we'll be forced to do the 6 month look-back, so those extra 3 months will really help since we'll have less time for the creditors to hound us and possibly get judgments and such before we can pass the means test to file the CH 7.

This process is so stressful with all the unknowns! Oh well, I guess that BK shouldn't be an easy process, otherwise it wouldn't be so character building and it wouldn't help change habits to prevent reoccurrance of financial problems.

[EricaCallaha]

No, I think nitwit still applies. She can't even speak with you for two weeks. You have a great outlook on all of this. Kudos to you for seeing the glass half full. I hope you get your suspension and your disability in a timely manner.

Good luck.

[BnkrptcyLwyr]

What? If you have lost income, seek conversion. Are you older? Are there job prospects? Are you likely to be able to replace the income?

Re-do the means test and I/J and if you qualify, convert and eliminate the debt. Why pay if you don't have to? What the hell!

The way to maybe handle this is to wait a few months, at least *look* for work or whatever, and then convert. At least you can say you tried to find unemployment.

We have people who made a lot of money before ... who then suddenly lose their jobs ... and we typically have no problems converting them if they qualify.

To me, it sounds like a way to eek out more attorney's fees (your attorney will file a fee application for this extra work) ... and then when it doesn't work ... you'll get charged again for the conversion.

I'd be grilling your attorney.

[lockedout]

Do you have to wait to fall under the means, or does a sudden loss of income justify a 7 conversion.

[BnkrptcyLwyr]

We usually don't have to wait because you can claim a loss of a job as a "special circumstance" to lower the income for the means test. And many judges don't quibble too much simply because you at least *tried* in a Ch 13.

[lockedout]

We just went through a job loss coupled with me losing over half my income in my current job compared to 5 months ago. I talked to our attorney, and they filed for a 90 suspention, and our going over our new income numbers to see what our next move should be. They said it would cost 750 for a conversion, it seems to me our attorney is on the ball.

[BnkrptcyLwyr]

I should add a caveat ... It also depends on what you're trying to do.

If you filed a 13 to "save your house" ... then staying in the 13 makes sense because if you're able to get enough of the income back, then you may be able to a plan modification which allows you to excuse payments, and get things back on track.

If the situation is dire and grim, and you see no way to get back to a level which would allow you to meet your goals, then it may be time to bite the bullet and convert ... and then just go into survival mode hording all the money you can and paying your prior creditors nada.

[woeisme]

My husband didn't lose his job, he injured his back and is no longer able to work. He was on temporary disability, that paid 70% of his original salary, but since commuting expenses went to $0 and no longer required childcare, and a few raises where I work, we were pretty much even with where we were at when we filed. Well, temp disability ran out and permanent disability is still in process, so now we don't have that disability income coming in, which is why lawyer says the trustee won't go for a conversion until we know what is going to happen with his permanent disability application. I'd be happy to pay lawyer for conversion (she's not charging any fees for filing paperwork for suspension) but she said our trustee/judge wouldn't go for it with us just losing this income and it possibly being replaced. I was hoping since disability income doesn't count in the means test (but does on the schedules) that we could work a conversion anyhow, but unfortunately our expenses are low, so we'd still have disposable income if he gets his disability checks.

[EricaCallaha]

That stinks. Can they somehow modify the payments until the permanent disablity decision is reached? I would hate to see you fall into a hole because you had to wait 6 months to 1 year for disability to kick in.

Good luck.

[woeisme]

Got a letter from the trustee saying that he no longer objects to our motion to suspend payments for 3 months. Does anyone know if that means it's approved, or does it now go to the judge for final decision? I'm thinking judge because there's no paperwork in pacer notifying my payroll to stop the deductions yet, so must be the trustee objection was just one step in the process, but that's just a guess.