7 to 13

[ncshopper]

Hello folks, I'm new here as of tonight. I broke my back in Oct 2009 was in hospital for 3 months. I have savings so I paid my credit card debt from online payments I had set up, until Feb when all my savings were gone. Then I was suppose to return to work in Feb, but my company laid me off. Then they refused to pay unemployment. I owed $35,000.00 in credit card debt, so I had no income coming in so attorney advised me to file chapter 7. Had the meeting with trustee and he got all excited when he found out I owned some land, a house that was paid for and two vehicles. The meeting was in April, so he wants the deeds to house and vehicles......... The employment office calls me the first week in may and tells me they ruled in my favor and I will get unemployment. So I ask my attorney if I can convert to chapter 13 as I have some income coming in now. He converts and I make one payment. I ask my attorney about the deeds and stuff trustee wants and he says not to worry about it now.

Now the chapter 7 trustee wants a hearing to deny the chapter 13 to me , he states that I converted to prevent him from finding all my assets and that I wasnot truthful. That he doesn't believe that I want to repay my debt and that the court should force the chapter 7 on me....Before the accident I made all my payments, never any late fees most time I paid ahead from bonus's from work and a moonlighting business I had....... I didn't know I was suppose to file my assets from the small business I had , so thats why the trustee thinks I was hiding things. I was filing personal and I never thought to include those items which come to about $20,000.00 in value.... The trustee wants I think to make me and wife homeless people.....Any advice would be appreciated ???

[justbroke]

The only advice I could provide is all in hindsight. Your attorney should have been very upfront with you and you should have disclosed all property (apologies if you had). I do not think that the Trustee can deny your conversion to a Chapter 13, because it's an absolute right to convert. The only thing the Trustee might be able to argue is a dismissal due to bad faith. Even a "mistake" in listing assets can cause a denial because the Trustee's really hate it when they find stuff you didn't disclose. You are witnessing their wrath.

Just work with your attorney and make sure your attorney explains to you the strategy, the options, and what the potential scenarios are on outcomes. You should have been told up front about the land and the 100% owned property. I'm guessing you're not in Florida or Texas where we enjoy an unlimited homestead exemption on our primary residences.

So sad, but your attorney should have warned you about a Chapter 7 and that it's a liquidation of all your non-exempt assets.

[ncshopper]

7 to 13

I know at the meeting with the chapter 7 trustee he asked me about the moonlighting business and the land I owned. I had listed everything except the business assets as I never thought about those items. He said that I probably under-estimated the value of all my assets and that I acted in bad faith... I honestly didnot try to hide anything. My lawyer said that my home and land would probably be exempt... Guess I am screwed now! I live in Eastern NC

[justbroke]

"Probably" be exempt is not the same thing as "is" exempt. How much did you pay this attorney anyhow?

For what it's worth, NC only protects $10K of a HOMESTEAD. If you're not living in that property and declared it your homestead, you will not exempt ANY equity. Some land sitting somewhere is likewise not exempt under the homestead.

You may have just got a bad attorney. You may want to find another one and substitute counsel. Claim that you received bad advice from the attorney and that you will proceed with Chapter 13. That you acted in good faith on bad advice.

That's about all I can say.