Cost to covert to a Chapter 7 ?

[MJJ57]

I've had a $1000 a month decrease in my monthly income. I was barely getting by while in a Chapter 13. I am considering coverting to a Chapter 7 but I'm not even sure I can afford to do that. Does anyone have any idea what it costs to covert and what is the process? I have no secure debt and no assests other than an older car and household furnishings.

[lrprn]

I've had a $1000 a month decrease in my monthly income. I was barely getting by while in a Chapter 13. I am considering coverting to a Chapter 7 but I'm not even sure I can afford to do that.

First, is the $1000/month decrease long-lasting or temporary? If it's just temporary, ask your lawyer to contact your trustee and see if you can skip a few payments. Many trustees are ok with doing this as long as you ask before starting to miss payments.

However, if your income loss is long-lasting, then can you afford to *not* convert? If you haven't already, talk to your attorney IMMEDIATELY about your income decrease. Find out how much it will cost to convert.

Don't assume anything in this kind of situation. You need to know the real facts before making decisions that can affect the rest of your life.

Does anyone have any idea what it costs to covert and what is the process? I have no secure debt and no assests other than an older car and household furnishings.

How much it might cost depends on your attorney and your current retainer agreeement. Most Ch 13 lawyers will charge a little more to do the conversion, but typically it's not as much as what you would have had to pay to file Ch 7 in the first place.

The only way to know for sure what *YOUR* lawyer will charge is to contact him/her and find out when you are sharing the significant change in your income.

[MJJ57]

Yes, the decrease is permanant. I'm not sure I can go back to my attorney because the balance of his fees were rolled into the Chapter 13 and I can't afford to pay the balance to him. I will have to throw his fees into the Chapter 7, if that is even possible.

[BKDefender]

mjj57 - that's my nightmare, that my clients will fail their chapter 13 plan or convert to a 7 and I lose those earned fees! But the answer is Yes, if you convert to a 7, the unpaid attorney's fees get discharged as well.

--William

[tigergem]

mjj57 - that's my nightmare, that my clients will fail their chapter 13 plan or convert to a 7 and I lose those earned fees! But the answer is Yes, if you convert to a 7, the unpaid attorney's fees get discharged as well.

--William

I find it oddly comforting to know that there is actually something that attorneys actually do fear. Sorry William. No offense meant.

[BKDefender]

If someone seems like they're flaky, then I won't put any fees in the plan and it all comes up front to avoid that problem.

There's two things I and most attorneys fear - losing earned fees and bar complaints. We'll accept the former and just about anything else to avoid the latter.

--William

[newbie2]

MJJ57: Depending upon how long you've been paying in to the Chapter 13, your attorney fees may have already been paid in full.

I know in my area (Michigan) the attorney was paid first out of the plan. She was paid in full by the end of month 4.

You may not owe your attorney anything more for your 13.

[HHM]

You have 2 choices,
1. Assuming you would qualify for chapter 7, converting
2. Modifying the plan to reduce the payment.

As far as affording to convert, you probably will be able too. Look at it this way, you will go 2-3 months without making your chapter 13 payment and most attorneys don't charge a "full" BK fee to convert. And some (very few, but some) just do it for you at no additional cost. If you modify, the attorney simply pulls more fees out of the plan.

[Bkman2]

I'm self employed and in a chapter 13 (in NV, wife didn't file). My attorney said that if in the future my income still goes down and I want to convert to a chapter 7 it will cost me about $500. I paid him $1500 upfront and the rest is in my plan. This is my second month and my 341 meeting is on the 16th of February. Got paid in January. Looks like zero for February. If March is a big zero also I'll be calling him with my options.