Filing 7 Tomorrow- Anything we need to do to prepare for possible 13?

[jjsmith]

We're filing our chapter 7 tomorrow and wanting to see if there's anything we need to do to make sure we can convert to a 13 if necessary.

Our attorney is showing our DMI as -$680. Our income right now is $100K, but we're below median income with a household of 10. We are desperate to keep our home and not have to move our children.

Will showing a negative DMI on our chapter 7 mean that they trustee will say that we don't qualify for a chapter 13 and force us to stick with a chapter 7 and lose our home if he thinks it has equity?

[lrprn]

Will showing a negative DMI on our chapter 7 mean that they trustee will say that we don't qualify for a chapter 13 and force us to stick with a chapter 7 and lose our home if he thinks it has equity?

If the Means Test shows you have no disposable income even with your high income (certainly possible with 8 children), to push you into a 13 the trustee has to show you do have sufficient disposable income every month (a minimum of $110-180 or more) that is enough to fund a creditor repayment plan for 5 years. YOu haven't given us enough information to know if that's possible in your situation or not.

How much equity do you currently have in your home? How did you arrive at the home's current value? Was all equity in your home protected by your state's bk exemptions? Will your house payments be up to date when you file Ch 7?

[jjsmith]

We don't have to do the means test, as we're a non-consumer BK. I'm not afraid of getting pushed into a 13, as we're under the median. But I am afraid of getting denied a 13 because we can't fund it.

We haven't missed or been late on a single bit of our personal debt, but for the last 6 years we've been sinking all our disposable income and creating debt to support bad investments. With the economy tanking and having no hope of selling our properties that we've been trying to sell for 4 years, we decided to file. My husband lost his bonuses we no longer have any disposable income, so the timing was finally right to stop the bleeding.

As far as equity in the house, who knows. The market is such a mess right now. We bought the home 9 months ago for $370K. I got a CMA report for $344K. But there are some in the area that have sold for a bit over $400K and my stinking neighbor just listed his house for $450K. My attorney said it's possible for our trustee to call realtors to get their opinion and who knows what they will say. Our attorney said it after realtor fees, homestead, etc. if the trustee can't get $410K for it, he won't try to take it.

I just know that Chp 13 is an option to keep your property, but I'm afraid that filing my bankruptcy showing a large negative DMI will make the trustee deny me the option to convert to a chp. 13.