Converting from a 13 to a 7

[cosmogal]

Recently we filed a motion to dismiss our chapter 13 and roll it over to a 7. We have a hearing on April 27 on it. We have not paid our trustee since November. We modified the plan in december but the payments were way too high for us to continue going through this. My husband had his hours cut way back at work and we didn't even make enough on his income for the payments. This is our second time with a 13. We dismissed one a year and a half ago cause the payments got too high and with my mom sick with cancer I just couldn't do it. So four years now into our plan and another four to go cause we redid it, we saw no light at the end of the tunnel. Now my husbands job is making him travel for work and with one vehicle it was impossible. It put us in a bind but he needed to work. I hope for a smooth transition to a 7. One question is, is that we have not filed our taxes and I am working on them. It seems we may be getting a refund which I am not sure how to handle. I am no longer paying the trustee and when we dismissed the last case, she sent a check with the balance to us. Now we are pending dismissal and waiting for an approval to move towards a 7. Not sure what happens to any refund now. I really could use it for a second vehicle. Its going to be hard. I feel for all of you going through this as well. I wish you all the luck cause its hard!

[justbroke]

Recently we filed a motion to dismiss our chapter 13 and roll it over to a 7. We have a hearing on April 27 on it. We have not paid our trustee since November.

I'm assuming that you motion is to dismiss and is not a motion to "rollover" or convert. Hearings are not required for a conversion to Chapter 7. It can be done on Notice, unless there are other issues with your case.

This is our second time with a 13. We dismissed one a year and a half ago cause the payments got too high and with my mom sick with cancer I just couldn't do it.

Aha, there's the issue... serial filer.

One question is, is that we have not filed our taxes and I am working on them. It seems we may be getting a refund which I am not sure how to handle. I am no longer paying the trustee and when we dismissed the last case, she sent a check with the balance to us. Now we are pending dismissal and waiting for an approval to move towards a 7. Not sure what happens to any refund now.

This is why strategy is important. Did you use an attorney? If you did, I wonder why he did a voluntary dismissal over a voluntary conversion. The difference is subtle but important but I'll explain, perhaps, your attorney's reasoning first.

The reason to dismiss, is because, technically, you're supposed to go by the data when you filed. Doing a conversion doesn't change your financial status as it was at the beginning of the case. That's why some need to dismiss.

When you convert, everything remains the same. The plus side to a conversion, over a dismissal, is that anything that you have after you filed, is NOT property of the bankruptcy estate. In other words, your tax refund would be protected because it's post-petition money, and the Chapter 7 Trustee couldn't get to it. However, if you dismiss and then refile, the tax refund is exposed unless you can exempt it.

You're filing with an attorney? You should ask him the strategy on the refund. I hope I didn't make this more confusing than it probably already is.

[cosmogal]

I have an attorney. They have file a motion for conversion to a chapter 7. The plan is the original plan just refiled to lower my payments. Its the same plan for the last 4 years. I added nothing to it nor changed it.
I called my attorney and asked about the refund if I recieve one this year and they have yet to get back to me.
I am not a serial filer. This was one plan, just redone with the new law.(remodified)
I do have a letter from the court to appear for the conversion. My attorney said that I have to go. This is normal in Florida. Either way, I am done. It will be a 7 or nothing.

[justbroke]

I do have a letter from the court to appear for the conversion. My attorney said that I have to go. This is normal in Florida. Either way, I am done. It will be a 7 or nothing.

It's not normal in Florida. I just converted my Chapter 13 case to Chapter 7 with simply a Notice of Conversion file with the Court. I'm ajlso in Florida. I said serial, because you filed more than once in the last 2 years. Even if you just refiled the same plan, you did get a new case number, right?

The only time I've seen a conversion done by motion is if the case was previously converted from one chapter to another, or it's a serial filing. I also believe that if you were pending dismissal due to non-payment, you can't file a Notice of Conversion (convert via notice, not on motion) because your case is already pending action by the Court for failure to follow a court order (make plan payments).

I am glad that your attorney is converting rather than dismissing then refiling. There's a big difference in how the two are handled.

[cosmogal]

Oh I see. Well I did get a motion to dismiss for non-payment and then we converted. Would that be why? Its a notice of evidentiary hearing. It says Notice by Debtor of Voluntary Conversion to Chapter 7. My attorney said that my husband and I have to attend this one and then a 341 meeting. Now I am thinking I should have done this in the first place instead of remodifying the original plan. I have been under so much stress with this and my mom dying. I just want to crawl in a hole and forget this ever happened!
Thanks for answering some questions!

[justbroke]

Oh I see. Well I did get a motion to dismiss for non-payment and then we converted. Would that be why?

Yep. Because there was already a motion to dismiss or a motion for relief from stay (RFS) pending, the conversion must be done on Motion.

Its a notice of evidentiary hearing. It says Notice by Debtor of Voluntary Conversion to Chapter 7.

Yes. But it's done on motion by not notice because the Trustee was already trying to close your case. The reason they do it this way, on motion, is to prevent debtors from "abusing" the system by waiting until they get a motion to dismiss or RFS and then just converting. This allows the court to make sure the secured creditors are protected and that if they detect you're playing the stay (RFS) game, then they can dismiss you WITH prejudice instead. The prejudice part means no refiling within 180 days of the order, so as to allow the secured creditors to foreclose without worrying about you refiling.

My attorney said that my husband and I have to attend this one and then a 341 meeting.

Yep, so the Judge can ask you why... but the Judge may not ask you anything. Also, you always get a new 341 Meeting.

Now I am thinking I should have done this in the first place instead of remodifying the original plan. I have been under so much stress with this and my mom dying. I just want to crawl in a hole and forget this ever happened!

I know exactly what you mean!

[cosmogal]

Thanks you have been very helpful. Funny thing is, it was my attorney who said to me back when I went to her was to wait till I got notice so that it would buy me some time. At the time, my mom was in Hospice and I was not working often and she died on Dec 13th. I did not have the money when my payment came due on Dec 28th. So my husband and I decided then that we were going to file a 7. Had I known I would have had her file it right away. I guess I will have to explain that to the judge, I don't know. Also at the same time my husbands hours were cut drastically at work. So we lost alot of income. I guess I will find out on the 27th of April. Either way, it really doesn't matter. If they don't do the 7, at least I won't be in the 13. Either way, I am looking at losing my home. I already worked out an agreement with my car company.
Thanks so much for everything!!!

[Billssuck]

I'm trying to convert to a chapter 7. What were the fee to do this? Did the lawyer charge above the ch13 fee already being paid or was it just the fees to the court to file the conversion? I have a phone conference with my attorney on April 8th to discuss our conversion and cost then but I wanted a little heads up if possible.

[justbroke]

I'm trying to convert to a chapter 7. What were the fee to do this?

The actual filing fee is $25. However, your attorney will charge you additional fees for the conversion.

Did the lawyer charge above the ch13 fee already being paid or was it just the fees to the court to file the conversion?

I am pro se, but attorney will charge you at least their hourly rate for a conversion. Remember, there's an additional 341 Meeting and new paperwork, which may include a new Means Test (on the Chapter 7 Form B22A).

[catleg]

When converting from a chapter 13 to chapter 7, does the new 341 mean that the claims period reopens?

[justbroke]

When converting from a chapter 13 to chapter 7, does the new 341 mean that the claims period reopens?

Everything re-opens, including a new bar date for dischargeability.

The only way that a new 341 Meeting is not scheduled, is if the case was previously converted and the prior 341 Meeting already happened.

[Billssuck]

Good info for me....thanks! It has been six months now since my husband got laid off from his job and we are below the median income now. I hope this works out for us because our house now takes about 50 percent of our income and it's just too much. We plan to try to surrender the house when converting to a ch7...

[justbroke]

We plan to try to surrender the house when converting to a ch7...

You will need to work with your attorney on the surrender part. Strategically, you'll want to indicate your intent to "Retain and Pay" or "Reaffirm" but never actually reaffirm. The reason is that you may need that payment in order to qualify! This does differ slightly by District, but be sure to work with your attorney on how to get that done.

[Billssuck]

Thanks so much for the good advice; I very well may need to indicate this just to make the conversion work for my DMI.

[cosmogal]

Well I went to the meeting ( not a 341) and after my attorney explained that there was no prior 7 that was discharged, he and the trustee saw no issue with me moving foward from a 13 to a 7. There were no additions or changes to my case as well. Everything was the same. So our case lasted about 2 min and we got the go ahead to move to a 7. Thank God! Now I am not sure if I get another 341 meeting as we did with the 13. I am confused about that. I will have to call my attorney on that one. I just hope its over soon. I need to know what to do now. I so far am not in forclosure and have not heard from my mortgage company as to whether or not they are going to approve my modification. Hopefully I will hear soon. Since my 13 was paying my mortgage company all along and they had not started forclosure before I filed, I am not sure what is going on. I will keep waiting till I hear. Hopefully saving to move in case doesn't hurt me in the 7. What else am I suppose to do? I have to have money to move with. I will be happy when this is over!