Converting a 13 to a 7, need some information.

[espo1357]

Newbie here.
Filed for 13 to remove the second mortgage and put to rest the lawsuits from the unsecured. I do not qualify for a 7 since I make over 100k. However, the downsizings are coming soon, and it doesn't look good.

I know that if I get downsized, that I can convert to a chapter 7, is that correct?

Can anyone give me some insight on that process. That is, converting a 13 to a 7 when there is a drop in, income?

Also want to note that I am 100k upside on my home, so bk 7 conversion would make sense if I lose my job (ARM adjusting next year too, so its a mess), because I don't care if I keep the home (unless the bank gets me on the HAMP).

thanks for such a wonderful site.

[justbroke]

I know that if I get downsized, that I can convert to a chapter 7, is that correct?

Yes, if your income falls to the point where you don't have the disposable income to support a Chapter 13.

Can anyone give me some insight on that process. That is, converting a 13 to a 7 when there is a drop in, income?

Generally, your attorney will first ask the Trustee to put your plan into forbearance for several months, to see if you get a new job. Generally, if after that time, you still don't have enough income to support your plan, your attorney files a Notice of Conversion. Then, voila, you're a Chapter 7!

You get a new 341 Meeting and new dates are set for creditors to file various paperwork (claims, objections, relief from stay, etc).

Since you seem already comfortable with surrendering the home in Chapter 7, I won't go through the pitfalls of having not made (many if any) payments on the stripped 2nd mortgage during the Chapter 13. You should just surrender the home.

Also want to note that I am 100k upside on my home, so bk 7 conversion

[espo1357]

Yes, if your income falls to the point where you don't have the disposable income to support a Chapter 13.

Generally, your attorney will first ask the Trustee to put your plan into forbearance for several months, to see if you get a new job. Generally, if after that time, you still don't have enough income to support your plan, your attorney files a Notice of Conversion. Then, voila, you're a Chapter 7!

You get a new 341 Meeting and new dates are set for creditors to file various paperwork (claims, objections, relief from stay, etc).

Since you seem already comfortable with surrendering the home in Chapter 7, I won't go through the pitfalls of having not made (many if any) payments on the stripped 2nd mortgage during the Chapter 13. You should just surrender the home.

Also want to note that I am 100k upside on my home, so bk 7 conversion

Appreciate your response.
Your response is what I suspected. I do have an excellent attorney, but didn't want to bring up anything until I actually do lose my job.

The 13 put my primary current, and got rid of the second. But, like you, I am also upside down to the point where I don't think it is worth it, especially since the mortgage is going to adjust soon.

Looks like the play is to stay in the home for free for about 1 year, maybe 2, and then when I lose the job, go to a 7, then throw a party, and start over.

Thanks again for your response.