Switching to chapter 13? Or dismiss?

[JCOX75]

My husband and I have had a change in circumstance that might make a chapter 13, or dropping our BK altogether, the better way to go for us. Our lawyer just filed our chapter 7 paperwork with the court, and just before this, my husband started receiving social security disability. His ssd case has been going on for years and we did not know when it would start. We weren't quite finished with our chapter 7 paperwork and had not provided the lawyer with the information regarding the ssd money (the amount, the new bank account we had to open, and info on what that money has been spent on). We made a BIG mistake not getting the information to the lawyer right away, because they went ahead and filed our paperwork even though we thought they were waiting on us for some additional information. Now we are really stuck. We spent a bunch of the ssd back pay check on what we thought was acceptable things like home repairs and loans from people who helped support us for the last 3 years. Now it looks like we deliberately did not disclose the money. We want to amend our paperwork and add the money and expenditures to our case as soon as possible, but we are afraid of being in trouble. Also, we are wondering if the courts would allow us to switch to chapter 13, if that might mean avoiding a trustee going after us and family members, for the money that was spent. The third thing we have considered is not showing up for the creditors meeting. From what I understand, our case would be dismissed which sounds like the best thing for us right now. I saw somewhere that the judge will dismiss with or without prejudice, basically meaning we may or may not ever try filing again.
We have a meeting with our lawyer monday morning to discuss this but it is just eating at me so bad right now, I can't stand it. Sorry for the long post.

[momofthree]

They do not have to dismiss your case if you don't show up for the 341, especially if the trustee is planning to turn you into an asset case. How much money did you pay to friends & family members before filing?

Amending your paperwork to show the preferencial payments is not going to stop the trustee from going after your friends/family to recover that money.

[JCOX75]

They do not have to dismiss your case if you don't show up for the 341, especially if the trustee is planning to turn you into an asset case. How much money did you pay to friends & family members before filing?

Amending your paperwork to show the preferencial payments is not going to stop the trustee from going after your friends/family to recover that money.

We paid back $2000 to a friend who gave us money for heating oil (it costs about $3000 to heat our home all winter) and $1200 to my in-laws who gave us money for more oil and some groceries.

The home repairs are more like $5000 because of the addition needing to be jacked up and secured.

I did not think amending the paperwork would stop the trustee from going after them; rather, I was trying to do the right thing and get our paperwork totally correct. I did not realize until I started looking on this site that the trustee could go after those people. Now I'm hoping to be allowed to pay that money out myself, out of the remaining ssd funds in the bank. I've been told ssd funds in an ssd bank account are exempt, so I'm hoping we will be allowed to keep them and then use them to basically pay back any non-exempt expenditures. It sucks to pay for things twice but I guess that's what our stupidity will cost us. Best case scenario anyway. I suppose worst is we go to jail?

[momofthree]

The trustee should allow you to pay the money yourselves. If you have the money available, that is the best bet, rather than converting to a ch.13 case. It'll probably just be the $3200 in preferential payments. Hopefully the $5000 in home repairs can be defended and you won't have to pay that back...

[starr4law]

I thought you said on another thread that you had repaid $6000 to friends and family.

[JCOX75]

I thought you said on another thread that you had repaid $6000 to friends and family.

I honestly don't even remember what I said on another thread. I have a sheet of numbers here driving me crazy. I guess I got confused. I suppose it doesn't matter. If we weren't allowed to spend the money it will have to be paid back out of what's left, whether it was to a family member, contractor, or anything else we spent it on.

[Floridagail]

I was waiting on my ssdi settlement when i filed chpter 7 and my attorney told me it did not matter.
Is it because you had not filed yet when you received the back pay? And if after filing date you received the back pay ssdi, it was ok to spend your settlement. I waited 33 months for my favorable decision , caused me to go bkrpt.