Conversion to Chapter 7

[Bobacus]

I have been in my plan for over 3 1/2 years (5yr plan) and I have just lost my job. I kept my house outside of the plan but I am currently 6+ months behind on my mortgage and because of job loss I can not keep up with trustee payments.

I am thinking of converting to chapter 7 but I have issues:

Rental house outside of chapter 13 in foreclosure
Behind on primary residence 6+ months
outstanding "payday" loans
past due credit cards - received two while in chapter 13

What would be the best move I could make??

Thanks

[justbroke]

I want to, but I won't address the payday loans and the credit cards directly. As soon as you lost your job, you should have notified your attorney so that they could take steps to put your plan payments into forbearance, or at least reduce the payments. The general process for conversion after job loss, is to first go into forbearance or a reduction in payment to the Trustee. The next step is to wait and see if you regain employment. If, after several weeks it is determined that you won't be able to recover, the attorney will file a Motion to Dismiss or Convert.

The nice thing about conversion, is that you can include any "new" credit that was accrued from the time of filing until the date of conversion. That means, the payday loans and credit cards could be included in the "converted" Chapter 7.

You are definitely in a bad spot, but conversion can help the debt issue. It will not help with finding a new place to live. You'll have to weigh so many things including when to move.

First step... contact your attorney!