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    #1

    Question about converting from a 13 to a 7...

    Background and question: A debtor originally qualifies for Chapter 7 at the time of his/her filing, but opts to file Chapter 13 (36 month plan) in order to strip a lien. Post filing of a 13 (let's say within a few months), the debtor would like to convert to a Chapter 7 due in order to give up the home.

    Would a new six month income "look-back" apply at the time of the conversion from a 13 to a 7 (in other words, would the debtor have to "re-qualify" for the Chapter 7), or would the original date of filing income "look-back" be used, as the debtor is in an active case when converting?

    TIA,

    Skipper
    Tags: None
    #2
    Originally posted by Skipper View Post
    Would a new six month income "look-back" apply at the time of the conversion from a 13 to a 7 (in other words, would the debtor have to "re-qualify" for the Chapter 7), or would the original date of filing income "look-back" be used, as the debtor is in an active case when converting?
    No. Not on a conversion. The original look-back period will apply. (Procedurally, some attorneys will dismiss the Chapter 13 if you need the "new" lookback period.)

    This may vary by District, but the majority of Districts view it that way. Remember, that your petition is a snapshot on the day that you filed. Conversion doesn't change that filing date.

    However, please bear in mind that the Trustee or United States Trustee may look at your current picture if they believe things have substantially changed. The UST could go for a motion to dismiss under totality of circumstances if your income to expense ration improved.

    I actually was in this same position. I qualified for Chapter 7 from the beginning, but wanted to initially save investment property. I never saved the property, but I was in my Chapter 13 for 20 months . That was killing me!
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment

      #3
      Originally posted by justbroke View Post
      No. Not on a conversion. The original look-back period will apply. (Procedurally, some attorneys will dismiss the Chapter 13 if you need the "new" lookback period.)

      This may vary by District, but the majority of Districts view it that way. Remember, that your petition is a snapshot on the day that you filed. Conversion doesn't change that filing date.

      However, please bear in mind that the Trustee or United States Trustee may look at your current picture if they believe things have substantially changed. The UST could go for a motion to dismiss under totality of circumstances if your income to expense ration improved.

      I actually was in this same position. I qualified for Chapter 7 from the beginning, but wanted to initially save investment property. I never saved the property, but I was in my Chapter 13 for 20 months . That was killing me!

      Thanks JB,

      Very shortly I plan to file for a 13 (although I qualify for a 7) in order to strip a lien/heloc. What I hoping for is that the lien holder may become open to a small settlement, in lieu of a strip. If I can get to this point, I would then prefer to convert to a 7 and be done with it. As an aside, I think I mis-typed a thought about giving up the home... If I can get the heloc lien removed, then the home may be worth staying in, as I do have a modification and I believe I am now considered "current".

      Thank you again for all of the advice and thoughts you provide on this board!

      Skipper

      Comment

        #4
        If you convert, will you have both BKs on your CR for 7-10 years?

        Just wondering...

        Comment

          #5
          Originally posted by pepperoncini View Post
          If you convert, will you have both BKs on your CR for 7-10 years?
          If it's a conversion, you only have the ONE entry and it will be for the Original date. In my case, my credit report shows that I filed in 2008 and will fall off in 2018. Had I dismissed my Chapter 13 and refiled as a Chapter 7, my filing date would show at 2010 and it would fall off the report in 2020!
          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
          Status: (Auto) Discharged and Closed! 5/10
          Visit My BKForum Blog: justbroke's Blog

          Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

          Comment

            #6
            Originally posted by justbroke View Post
            If it's a conversion, you only have the ONE entry and it will be for the Original date. In my case, my credit report shows that I filed in 2008 and will fall off in 2018. Had I dismissed my Chapter 13 and refiled as a Chapter 7, my filing date would show at 2010 and it would fall off the report in 2020!
            Wow. That's good to know.

            I was stalling my BK13 but I may just file it now and convert in 18 months when I can convert to BK7. I didn't want 3 BKs on my report at the same time. (filed BK7 in 2004)

            Comment

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