Converting to Chapter 7..timing is my concern

[freeme0215]

Hello,


I am 7 months into a chapter 13, in a three year plan. I live in Florida. I am waiting for a loan modification with LBPS(mortgage)...this has not been completed.

I was on Long Term Disability when confirmed, as part of the LTD policy I had to apply for Social Security disability.

I just heard last week, that I have been granted SSDI. The LTD payment per month was $3200..in the SSDI I will get $1500. This cut in income, I believe with cancel out the loan mod as I would no longer qualify

I have not yet been paid from SSDI and I am still getting the LTD payment of $3200.
The LTD payments will stop once SSDI sends me a payment. which could be within a month

With all of this said, I feel I am going to have to convert to a Chapter 7, surrender my home. My concern is the timing. I have stopped paying the trustee as of April 23rd(I did not send in my payment). I have alerted my attorney of my concern that I may have to convert.

1)Should I wait for a notice from the trustee?? In Florida there is a notice of delinquecy sent to me and the attorney...there is 45 days from the date on the notice to get payments up to date or the chapter 13 will be dismissed. It is at that point I believe I can file for conversion....is this the correct sequence I should be following??

2)I also have IRS taxes within in the Chapter 13, they were scheduled to get their first payment with the April 23rd payment. What do I need to do as far as "notifying" the IRS?

3) Can I add creditors when converting?

4) I will get a "lump sum" from SSDI, do I have to factor this money into the BK conversion? The lump sum is for past due monies owed me since I filed for SSDI or are these lump sums protected from being garnished?

Thanks

[IamOld]

May I ask one question - are you sure that your LTD will STOP!? Unless you aged out of LTD coverage, what NORMALLY/GENERALLY happens is that your LTD pay is just reduced by what SS will pay you...so for example you got $3200LTD-$1500SS=NEW LTD AMOUNT...in other words, you would receive the same amount just from two different sources. THe reason why ins co's want you to apply for SS disability is because then they can reduce what they pay to you, not STOP it, unless your former employer had a really crappy and cheap policy. You should have the plan doc for your LTD - it should state it clearly...if you like, if you have it, let us know...I'm in the ins business...

[freeme0215]

Ltd

My LTD is for a mental disorder and with that, the LTD would have ended in Sept 2011.

Thanks

[IamOld]

Of course that explains it - it's limited to 24 to 36 months...excellent point. In that instance you would I think qualify for the conversion to 7 - did you speak to your atty?

[freeme0215]

I have been reading tonight(seems like all night)...about the ability of th BK trustee to take the lump sum SSDI payment.
When converting to a 7, what date is used a the filing date, the date I filed CH 13, or the new date I file for the conversion...

As there is a 6 month look back period... as of right now, I do not have the lump sum, so the timing of th filing to me seems to be of importance.

My attoorney is out of town and tonight I started thinking about the lump sum(I just received the notice of award from ssdi)

Thanks again