Thinking of Converting to Chapter 7

[FiledinMarch]

I filed Chapter 13 in March of this year. I have completed only 5 payments.

I am not currently working, and have not worked for over a year now. I filed by myself, my husband did not file bankruptcy.

I do not own a home, do not own any non exempt assets, and have negative equity in the one car that we have.

I am thinking of converting to a chapter 7, which I feel I should have filed in the first place.

I have been reading this board and have read a few places that it is difficult to convert once my plan has been confirmed (It was confirmed in May).

My attorney seems to think that I will have no problems converting, but he is very old and forgetful and I am beginning to think I should have hired another attorney to help me with my case.

I am living in California now, but have only been here for one year, and previously lived in Indiana for 22 years.


My question is has anyone else been in this situation??? Any advice??

I decided to try to convert because my husband is military and will be receiving large bonuses sometime next year that I do not want to have seized by the trustee (which I do not know if she could seize anyway, as he did not file)

I am planning on reaffirming my car, if that matters.

Any advice greatly appreciated!

[HeatherB]

Were you currently employed when you filed? Were you married at the time of filing?

I wouldn't think that they could take your husband's bonus if he was not on the paperwork. I don't think they asked me anything about my husband at all since I filed by myself. I lost my job and missed a few of the scheduled payments from my Chapter 13. So many were that they said I had to pay even more and get caught up in 3 months time. I finally couldn't take it anymore and changed to a chptr 7. Had no problems at all with doing so. Keep in mind, though, that I filed a 13 in 2004 and just converted it this year. I don't know if the time between filings would effect it or not. Not sure if they are more strict where you live, either.

[lrprn]

I filed Chapter 13 in March of this year. I am not currently working, and have not worked for over a year now.

Whoa...hang on a minute. No competent bankruptcy trustee in the US would confirm a Ch 13 case for a person filing alone with no income for the last year and no current employment. There's no disposable income available to fund a plan, even pay your creditors as much as they would get in a Ch 7 filing, if your income is zero.

How did you manage to file a Ch 13 without your husband and get it confirmed with no income???

[HeatherB]

Whoa...hang on a minute. No competent bankruptcy trustee in the US would confirm a Ch 13 case for a person filing alone with no income for the last year and no current employment. There's no disposable income available to fund a plan, even pay your creditors as much as they would get in a Ch 7 filing, if your income is zero.

How did you manage to file a Ch 13 without your husband and get it confirmed with no income???

Wow, I must have read over that one. I'm curious to this, too.

[FiledinMarch]

I don't know?? It's on my paperwork that I'm not working. I quit my job in August 2006, filed in March 2007. I never told them that I was working. All of the income that was considered was my husbands, but he did not file bankruptcy. The trustee asked me if I was planning on looking for a job, and I told her that I would be 'looking for a job' after my license was transferred to CA, but I haven't gotten it transferred and haven't gotten a job.

Yes, I was married at the time of filing, I have been married for around 4 years now. No, I have not worked since August 2006, when we moved to CA.

The question I am asking is, is it difficult to have a case converted to a chapter 7 after the chapter 13 has been confirmed? I haven't had any decreases in income, but I am below the state median. I feel that I should have filed chapter 7 in the first place, and I'm kind of kicking myself now.

[lrprn]

The question I am asking is, is it difficult to have a case converted to a chapter 7 after the chapter 13 has been confirmed? I haven't had any decreases in income, but I am below the state median. I feel that I should have filed chapter 7 in the first place, and I'm kind of kicking myself now.

No question you should have filed Ch 7 if you have no assets of your own to save in Ch 13.

Converting to Ch 7 from Ch 13 won't be that hard, especially since you have had no income for the last year and probably none coming anytime soon.

I'm still stunned that any trustee would be willing to confirm a Ch 13 case filed only by you knowing your husband's income would be the plan's sole support....wow. Even in a community property state like CA, that is way off the beaten path....this is out in the bushes miles from anywhere!

If I were you, I'd strongly consider finding a new lawyer to do the conversion because the one you have now really took you down the wrong bankruptcy road. You need to know that he may have done that on purpose because he makes more money if you file Ch 13 than Ch 7. Something for you to think about.....

Keep asking questions, FIM - that's why we're here. We'll help you sort things out as much as we can. Hang in there - brighter skies are ahead!

[FiledinMarch]

lrprn Thank you for your reply. I really feel like I am flying blind here. My lawyer is not very good at returning my calls, and looks to be about 98 years old. I feel that I made a mistake in hiring him, honestly. But, when I do get him, he is a very nice man who I feel is doing his best to help me. He did explain to me that I could file either 7 or 13, and I chose 13, but I do feel that he could have explained the pros/cons of each to me a little more clearly. I thought that what happens after the bankruptcy has no effect on my plan, and that I just had to make my 400$ payment every month for 5 years and be good to go. I had no idea that the trustee had so much control over my life during the bankruptcy, which is why I chose to convert to a 7 and be done with it. I just want to get on with my life.

I get what you are saying about the trustee. I have read about a chapter 13 being a 'wage earners plan', and while I consider what I do very valuable, I do not currently have an income. I have a feeling the trustee I have may be somewhat lax, I do not even have to submit copies of tax returns at the end of the year. (Which seems strange to me also, as I'm in a 0% plan, I figured they would want my returns which are always a few thousand dollars)

No, I have no income coming in anytime soon. Right now I stay at home with my 2 children, who are both very young.

[lrprn]

I consider what I do very valuable

I consider staying at home with your young children very valuable as well, FIM. We have several SAHM (stay at home moms) here in the forum. Nothing should ever be more important than raising our kids.

I have a feeling the trustee I have may be somewhat lax, I do not even have to submit copies of tax returns at the end of the year.

Sigh.....you have the trustee of all our Ch 13 dreams, FIM!

I figured they would want my returns which are always a few thousand dollars

Just curious....if you have no income, how do you have several thousand dollar refunds? Are these your husband's tax refunds?

[CindyLou]

just curious, could it be because she lives in a community property state that they considered her husband's income or does that have anything to do with it at all??

[FiledinMarch]

Yes. I guess now they are my husband's tax returns. Last year I worked up until the end of august, so my income was considered as well on our tax returns, and we qualified for the EIC. This year the only income we have had has been my husbands.

My lawyer filed my conversion paperwork today. I'm crossing my fingers that this goes through without a hitch.

We are supposed to be moving to Indiana on Oct 26th. I'm hoping my meeting will be before then. Any ideas if they still do telephone conferences for 341 meetings? My lawyer says that if it's scheduled after we leave, I may be able to get a telephone conference, and If I can't, I will have to fly back to CA, which would really stink.

Thanks for everyone's help!!

[FiledinMarch]

Anyone know about the teleconference 341 meeting? My husband is military, I just filed to convert today, and we move in 5 weeks. I'm really worried about what will happen if my meeting is scheduled for after we move, I don't think I will have the money to fly back out here!

[lrprn]

Anyone know about the teleconference 341 meeting? My husband is military, I just filed to convert today, and we move in 5 weeks. I'm really worried about what will happen if my meeting is scheduled for after we move, I don't think I will have the money to fly back out here!

There's no way to predict this, FIM. Some trustees may allow a conference call under these circumstances, but most will not. You can request it and hopefully your trustee is an understanding one. Personally I'd be doing my best to set aside cash for a plane ticket or ask family now if they can help out with a short-term loan if your 341 is scheduled after your move.

[coma]

You might be able to swing the teleconference thing if you play up the military part. It might not work, but you've got to try. We're military too, and we decided to transfer our case, but we're in a 13 to stay, since it's been converted once already. Anyway, keep asking questions, and the very smart people here will do you a world of good

[FiledinMarch]

So if this doesn't go through, am I going to have to start all over?? My chapter 13 had already been confirmed, then I decided to go for 7. Can I just go back to my 13 if this doesn't work out??

[lrprn]

So if this doesn't go through, am I going to have to start all over?? My chapter 13 had already been confirmed, then I decided to go for 7.

FIM, ask your lawyer to ping the trustee and relay the need to have your 341 meeting as soon as possible because your husband's military duty requires you to leave the area in five weeks.

It's possible that your 341 could be continued (legal speak for rescheduled) until you can fly back and attend, although that isn't ideal.

Can I just go back to my 13 if this doesn't work out??

After the forms are filed to convert to Ch 7, you can't just back out like nothing happened.

Don't rush to make decisions until you know where you stand.

First see what your lawyer can do about getting your 341 scheduled as quickly as possible and inquire about a conference call if that isn't possible. That's where to start. Hang in there - this may all be a tempest in a teapot!