Switch From C13 to Ch7???

[motomom]

First of all THANK YOU to all who help here. I wish I would have found you 3 months ago

In fear, after we found out we could not refi to pay off debt, we decided to file BR. Our attorney said we made a little too much for 7 so we had to go 13. This was B4 I knew anything about either so we jump on board. In the time attrny has been getting paperwork together I have learned SOOOOO much, mainly on this forum. After educating myself and working on getting our lifes to work without credit cards I am thinking 7 would be better for us. We are barly scrapping by and I do not know where we will come up with money to make a monthly payment.
My question is........if I reduce my income (I am self employed and have 1 client I would love to get rid of & my husband can not change his income), and get our excess assets in order over the next 6 months (ie sell what we can) would it raise red flags with the court???? If I would have known now 3 months ago in my state of panic I would have done this. We have not filed, we are meeting with attorney to do signing in 2 weeks. We only interviewed 2 attorneys and went with the one that only handles BR. (again I was clueless and scared). In my embarrassed financial honesty this is the best thing that has happened to us.

Your advice is greatly appreciated!

[justbroke]

The court will always ask why you are "underemployed". While it's okay for one spouse to stay home and raise children, they even asked me why my wife didn't work. I said, well, she maintains the households, watches the kids and I travel frequently. The Trustee didn't say anything after that.

You may be able to file Chapter 7 now? I don't know your numbers, but look at them again. Just being over-the-median doesn't mean that you don't qualify for a Chapter 7 discharge.

[motomom]

WOW, thank you. So I am looking at my attorney as the BK"God" if I may say it that way, everything they say I believe. Soooooooooooo how can I qualify for 7 if I am over the medim income??? (they use my gross sales not net as income)

(Congrats on your wife being at home. That is why I work at home so I can be here when my kids need me!! )

[justbroke]

You can be over-the-means and still qualify for Chapter 7, because they look at the Means Test to determine if you case is abusive or not. It depends on what your (allowed) expenses are versus your income (averaged over the 6 months prior to filing). They call this income less expenses, your disposable income. If your disposable income is less than $166... (and, when multiplied by 60, is less than 25% of your unsecured credit), you get to stay in a Chapter 7.

Why don't you go to LegalConsumer.COM and take the "means test" there. It will give you an idea of what your excess income (disposable income) is.

While there are other factors (on what's allowed, what you're surrendering, etc), taking the Means Test can give you a good idea of where you stand.