Dismissed from Ch 7 but said could convert to Ch 13

[texanboy76]

Hi everyone,

i didn't get very good news on my Ch 7 however they did leave the option to convert to Ch 13. I have a few questions as they stated in my letter my house was over 2 times the IRS amount etc...If you convert to a Ch 13 will they make you sell your house in order to fund the 13? We barely are cutting it and I mean BARELY by about a few hundred bucks a month. This was a single filing as my wife didn't file to try and preserve her credit. Also how does the Ch 13 trustee look at your case when it was denied at Ch 7? Do you have to provide all the details and documents all over again? Any help or encouragement would be appreciated....

[lrprn]

If you convert to a Ch 13 will they make you sell your house in order to fund the 13?

No, you cannot be forced to sell your home to fund the 13. However, you need to take a hard look at any equity you have in the house to ensure it's completely protected by your states' homestead bk exemption and any other exemptions that can be applied to your home value.

We barely are cutting it and I mean BARELY by about a few hundred bucks a month.

This could be a sign that you are paying too much of your income towards the house payment. A house payment over 33% of your combined incomes is considered risky.

This was a single filing as my wife didn't file to try and preserve her credit.

I hope you don't live in a community property state then. I also hope that your assets don't have both your names on them as owners and you don't have any unsecured debts with both your names on them as responsible payers. That isn't going to be a pretty picture with just you filing.

Also how does the Ch 13 trustee look at your case when it was denied at Ch 7? Do you have to provide all the details and documents all over again?

Will your filed 7 be converted to a 13 or will your 7 be dismissed by the bk court and then your lawyer will file your 13?

If you feel comfortable sharing, what happened to push your 7 into a 13?

[texanboy76]

No, you cannot be forced to sell your home to fund the 13. However, you need to take a hard look at any equity you have in the house to ensure it's completely protected by your states' homestead bk exemption and any other exemptions that can be applied to your home value.

This could be a sign that you are paying too much of your income towards the house payment. A house payment over 33% of your combined incomes is considered risky.

I hope you don't live in a community property state then. I also hope that your assets don't have both your names on them as owners and you don't have any unsecured debts with both your names on them as responsible payers. That isn't going to be a pretty picture with just you filing.

Will your filed 7 be converted to a 13 or will your 7 be dismissed by the bk court and then your lawyer will file your 13?

If you feel comfortable sharing, what happened to push your 7 into a 13?

[lrprn]

For all these reasons, the court concludes that, while the totality of Debtor’s circumstances supports a finding that his filing of chapter 7 constitutes an abuse of that chapter, he should have the ability to deal with the claims against him under chapter 13.

I'm assuming that you filed Ch 7 first and the court thought you tried to hide assets or otherwise acted fraudulently when doing so. Did a bk lawyer file your Ch 7 or did you do it pro se (on your own without a lawyer)?

Under these circumstances, Ch 13 appears to be the only bankruptcy relief you are going to get if you have to file now. If you didn't file with a lawyer, please interview at least 3-4 experienced lawyers who file 13s often. It's going to be more complicated now since you filed already once and the courts found your filing fraudulent. Expect to pay more because of what's happened. If you do decide to file a 13, your case is going to scrutinized by the local and US trustees with a fine-toothed comb.

[justbroke]

This is what the court said about my Ch 7 going to a Ch 13...

I don't see anywhere in your quote where the Court stated that you pay too much for your home. I think you had other issues in your "totality" of circumstances.

If you convert to a Ch 13 will they make you sell your house in order to fund the 13?

No. The purpose of a Chapter 13, is really to keep property and possibly providing a dividend to unsecured creditors.

Also how does the Ch 13 trustee look at your case when it was denied at Ch 7? Do you have to provide all the details and documents all over again?

They don't care if it was converted from Chapter 7. However, they do care you filed a prior case, and it was dismissed. If your case is converted, then they use the same information. You would need to file a new Form B22C (Means Test) so that your disposable monthly income is calculated for a Chapter 13.