How are you all and Another one bites the dust.

[Granny]

Hi everyone. It's been a while but I never forgot all the wonderful people here. How is everyone?

After all the drama early on, life turned out good and we rocked along for 24 months with no glitches, until yesterday. Hubby was informed yesterday that effective immediately, his hours have been cut, resulting in a decrease on income of $31K per year. He was working 27 overtime hours each week and he's cut to 4 overtime hours. That is a 44% reduction in income which leaves no money to pay the trustee (and a few other things as well).

I've spoken to the paralegal and according to him, I have two options.
1. Reduction in payments. (ain't happen', I have sent my last payment)
2. Convert to Chapter 7.

There are no extra funds in my budget for a reduction in payments. The conversion requires an additional fee and I will have no additional money for an additional fee, so it looks like I will have to opt for a dismissal. Since I've already paid March, the trustee won't know there is a problem until the April 19 payment is not made. So I'm guessing May or June for a dismissal.

Any words of wisdom for me?

Thanks

[justbroke]

First, ask for a suspension of payments. Then, work on getting a conversion. I believe the conversion fee is $25.00 plus the lawyer's fees. if you have a decent lawyer, they should convert it very reasonably.

I wouldn't want to be 2 years into plan, and be dismissed, but I know this happens more often than not.

[aa06a47]

Granny, so sorry to hear about your problems. I feel for you and being in the auto industry I am seeing layoffs, hour cuts out the ying yang right now. I'm just hoping to have a job the next 2 years.

Review the concern with the attorney. They can generally petition the trustee for additional funds for attorney payment from your normal plan.

OT may return which would allow you to get back on track. Of course, not sure what you would lose in a chapter 7, so that may be the best way to go. I wouldn't allow a dismissal, I would have to go for a conversion to chapter 7. You don't really want to get a dismissal. You could check with your trustee, but I do not think the payment you just made goes out to the creditors until the first of the month or next month. If you file for a conversion, that money should either come back to you or could be used to pay attorney fees.

[AngelinaCatHub]

First, ask for a suspension of payments. Then, work on getting a conversion. I believe the conversion fee is $25.00 plus the lawyer's fees. if you have a decent lawyer, they should convert it very reasonably.

I wouldn't want to be 2 years into plan, and be dismissed, but I know this happens more often than not.

[lrprn]

Any words of wisdom for me?

First, I'm so sorry to hear about your latest troubles, Granny

As I recall, wasn't keeping your husband's work truck an important reason you had to be in Ch 13?

And if you did shift into Ch 7, what would happen that is worse than a dismissal?

[tofargone]

Aint the economy grand. I'm just at 23 months everything was going good, even managed to take a small vacation last summer. On Monday at 8:15 the VP came into my office and I did the walk of shame. My position was eliminated due to financial reasons, no notice, no severence, nothing. I now am going to go from 60K a year to $360 a week in unemployment. There hasn't been anything on the job boards in months so I am thinking its going to be a long road. I am going to ask for a temp halt to the trustee, but I can't pay my mortgage either so it won't really matter. I guess the light at the end of the tunnel was just the train comming to run me over.


Good luck with yours, I am hoping for a either a quick sale or a miracle.

[AngelinaCatHub]

Aint the economy grand. I'm just at 23 months everything was going good, even managed to take a small vacation last summer. On Monday at 8:15 the VP came into my office and I did the walk of shame. My position was eliminated due to financial reasons, no notice, no severence, nothing. I now am going to go from 60K a year to $360 a week in unemployment. There hasn't been anything on the job boards in months so I am thinking its going to be a long road. I am going to ask for a temp halt to the trustee, but I can't pay my mortgage either so it won't really matter. I guess the light at the end of the tunnel was just the train comming to run me over.


Good luck with yours, I am hoping for a either a quick sale or a miracle.

[Granny]

First, I'm so sorry to hear about your latest troubles, Granny

As I recall, wasn't keeping your husband's work truck an important reason you had to be in Ch 13?

And if you did shift into Ch 7, what would happen that is worse than a dismissal?

Your memory serves you well, but the truck wasn't the reason we filed, it was just an incidental to the filing (and a royal pain in my side). I filed to save my house, because we weren't making enough with the truck to pay the bills. The house is all caught up and now the trustee payments are going to the unsecureds, so there's no danger in converting or in getting dismissed. We ended up giving the truck back and hubby got a real job that paid real money.

There's no problem switching to a Ch 7 except I don't know what the attorney is going to charge me to do it. As I understand it, the filing fee is only $25.00 but I have no idea what his fee is. The problem is with the cut in hours, I won't have the money to pay him if it's anything more than say $500.00.

From what the paralegal told me, they redo all the paperwork and it replaces my Ch 13 paperwork to look like I filed a Ch 7 instead of a 13. And it will look like I filed a Ch 7 in Dec '06 that will eventually be discharged in '09. That makes no sense whatsoever.

I am still subject to the 6 month look back and I doubt I will qualify for a Ch 7 before the case goes before the judge for a dismissal. This will be certainly be true if they use the '06 income guidelines. Hubby's real job put us substantially over the median income. The paralegal said we could use a few of the reduced income paystubs to argue the point, but since they wouldn't consider my reduced income the first time I filed, why should they now?

Another worry I have is that my car was about to throw a rod and hubby traded it in and another that we are now making payments on. I didn't finance it, he did, but I'm sure that's not gonna sit pretty with the trustee.

The good thing is that I am in Texas, so a few cease and desist letters should end the turmoil I will face from my creditors with the dismissal.

How does one get a suspension of payments so I can ride out the 6 month look back?

[BigJohn]

I would check with your lawyer about a suspension and if you would be considered a hardship case. There are solutions, the problem is selecting which solution.

[Granny]

After thinking about this some and checking my spreadsheets, we were under the median when I filed in '06. If it had not been for the house, I would have qualified for a Chapter 7. Heck if it hadn't been for the house, I wouldn't have filed, but that's beside the point.

I crunched the numbers and if I wait until the first of June, 5 weeks after I miss the first payment, I will be under the median for '09 and only slightly above the income for '06 and still below the median for '06.

Still I don't have any clue as to how much the attorney will charge for the conversion, so it may still be pointless.