Property sale as part of Chap 13

[doublestop1]

I have a parcel of property that I'm being required to sell as part of my Chap 13 plan. In fact, the largest part of my payback is to come from this sale. It's a HUGE part of my plan. Does anyone know what might happen if I'm unable to get the property sold? Or, more likely, if I'm able to sell it but for quite a bit less than we initially hoped? (the plan was written too years ago and the market is now much worse). My attorney mentioned something about having to petition for a lower payout, based on our overshooting the market value. But I wasn't sure if there was a risk that they'd convert me to a 7 and try to make up the difference by liquidating anything else I have of value (which isn't much....the land represents the bulk of my assets, based on our Chap 7 test).

[justbroke]

If you can't sell it, then your plan is infeasible and your case would be dismissed. The problem with "lump sum" plans is exactly what you're experiencing. There are plans written that have a lump sum in -- say -- month 48 of a 60 month plan! Then the market changes and you aren't able to refinance or sell some property.

Sadly, but the plan would absolutely fail and your case would be dismissed. It would be 4 useless years. I wonder why attorneys still write this type of plan contingent on property sale, unless the property is really valuable and 50% of its value would payout the plan at 100%!

(As for forcing you to a Chapter 7... they only do that if they think you are playing games. It would still need to go before the Judge anyhow, on an Involuntary Motion to Convert.)

[doublestop1]

Thanks for the info. My hope is that it will sell, but my guess is that it's just going to be a significantly lower amount. My atty told me not to be too concerned about it. Just to let it play out...and if an offer comes in lower, he'd go back and petition to amend the plan based on the down market. It's interesting, though. When you say "dismiss," what exactly does this mean? If it gets dismissed, and I get thrown back to the wolves, couldn't they (creditors) eventually force me into a 7 anyway? I still don't have a lump sum to settle everything out with them individually. I considered that in the beginning and that's why I eventually went with a 13....since I'm employed and had (so we thought) a saleable asset.

[justbroke]

Dismissed means that the case is closed without a discharge. Yes, you would be at the mercy of the wolves. I'd follow my attorney's advice and lean on him/her. Just because a debtor gets a Chapter 13 discharged, doesn't mean they are entitled to or will file a Chapter 7. Creditors know this as well.

The best thing to do is to listen to your attorney. They know much more about your financial circumstance(s) and how the bankruptcy court tends to move in your particular area. Already your attorney has allayed your fears by telling you that he'd go back and amend your plan! This would reduce the payback and may make the plan once again feasible.

[doublestop1]

That's good advice, actually. Very much appreciate the feedback!

[Jinks221]

Hardship/Chapter 7

We are in a very similar situation. Our filing had a lump sum that was dependent on a refi of our house. Since value is down, it is no longer possible but we have paperwork that we tired. Lawyer says we can file hardship but should go for the Chapter 7 since we have back property taxes that somehow were not paid as priority in our case. Would we file both? We only have unsecured left except for the taxes. Would we be in danger of losing our home if we file chapter 7?
thanks for any input.

[IHateChase]

Jinks, you might want to start a new thread with your question. You'd have to give more info about the (true) value of your home and what you owe on it.