Conversion from 7 to 13?

[AZgirlie]

I know it's probably rare, but it has happened to me. I have the absolute worst luck...

The AZ trustee accepted my means test but the US trustee did not. I am not married, do not own a house, do not have children, and do not own any property worth anything. Needless to say,I'm paying waaaaaay too many taxes. I'm also filing pro se since I cannot afford to pay my debts, much less an attorney.

My question is this - how can I convert to a chapter 13 when I have no disposable income? Can I fight it? Can the conversion be forced? AZ has absolutely no information on this at all.

Thanks in advance!

[CATCHMEIFYOUCAN]

The Means Test may have shown you have no disposable income, yet schedules I and J show you have plenty.

For example, I purposely filed for Ch13 (one: because I had 2 full time jobs at the time, two: because I gambled mostly with my credit cards-so i was afraid of objections). The Means proved I was negative $60 odd dollars, while schedules I and J proved I had $800 disposable!
My lawyer proposed "in good faith," a payback of $250 however the Trustee wanted it all. Thats where you fall into the "gray area," of the "new law." Its a BIOTCH. Several months later I decided to quit one job, which put me under the median for my area (being single, no house, just a car) and so I was able to convert to Ch13. Unfortunately there is no way around this, unless you can somehow make LESS MONEY.

Best of Luck, CATCHMEIFYOUCAN

[aachudneymiles]

wow and i thought it would be a hearing or something where you would have a chance to show you have no dis. income...

how did you shown 800 dis. income. like on my i and j I made it look ( and truely is this way) about 26 dis. income.. just wondering did you come up with 800 dis. or did the trustee add your income and exp. to be 800 based on your state median? Cause I doubt if anyone had 800 a month to just give we all wouldnt be here...well good luck and god bless

[CATCHMEIFYOUCAN]

I don't really don't know, I don't have much expenses .. working two full time jobs DOUBLED my income. My rent was only $625 a month .. the standards allow almost double that much. I lead a frugal life, so I had lots of disposable income (all going to gambling). Well I my plan was never confirmed at $800 because I was able to convert to Ch7 instead just by quitting one job (it made sense "pay $800 a mo. for the next 5 years OR just quit one job for several months and pay NOTHING, which I could have done from the beginning but I wanted to show that I was trying to pay the creditors back .. yeah right!)

The Median Test allows you to use the standards to the max, but schedules I and J don't (I think thats where the real money shows!) Thats where the new laws are tripping people up. Congress didn't do a good job, and creditors are actually losing more with the new laws, because a big percentage of 13ers don't make it all the way through.

Catchmeifyoucan

[keepmine]

What exactly is the U.S. Trustee objecting to?
What is your gross income for the prior 6 months? Also, could you list your expenses?

[JollyGG]

Are you above the median for your state and household size?

It might be time to find a lawyer. They may be able to salvage your chapter 7. If they cannot they can help you get a chapter 13 plan you can afford. It is usually a bad idea to file a chapter 13 without a lawyer.

Meet with 3 or 4 lawyers and see what they have to say.

[AZgirlie]

I really don't know what the US Trustee is objecting to, since they didn't electronically file the form. All I can see is that there is a "Statement of Presumed Abuse" filed.

My Schedules I and J show income in $2993 and expenses of $3082 - - no disposable income. I am above the median income for my state, but the problem is that I pay 1/3 of my income into taxes. My paystubs show this and my tax forms show this.

Can't afford a lawyer at this point, so I'm attempting to find all the information I can on my own. Thanks everyone.

[JollyGG]

Have you had your 341 meeting yet?

[AZgirlie]

Yes - my 341 was on 10/16 and the Presumed Abuse was filed 10/25.

[WantToBeDebtFre]

I wonder if it's because the trustee didn't agree with some of your expenses. Can't that happen?

[ohwell]

AZ is there any way that possibly you didn't do your accounting properly? Are you on a payback plan to the IRS that you included in your schedules? I know that being single they take alot of taxes out, but that is demonstrated on the means and the schedules. Just thinking maybe there is a glitch somewhere...

I am sorry that this is happening to you.

[freshstart06]

Ok AZgirlie, don't give in. I live in Arizona, we were well over the median and we are now awaiting closing. The problem was that you were negative on your schedules. I filed pro se but I had the paralegal in the world, I don't think I could have paid enough money for a lawyer that could equal the treatment I received from my paralegal.

She did a lot of things that I thought was going to kill my case ie as you know on the means test you are suppose to only add 6 months of pay well she added the last paystub after the 6 months because some trustess will look at that. Also, if you over the median, Never and mena Never be negative on schedules I and J. this is asking the US trustee to look into your file. You have to have at least no more then $20 dollar disposable. To be honest this is more realisic to high income filers.

Now what you need to do is fight, prove that your taxes are too high, I understand, my husband's taxes were eating up most of his check this is one reason why we passed the means test. However, the UStrustee may require you to claim more and if that gives you disposable income once your taxes are reduced then you will have to go into chpt 13.

In our case my husband claim as high as he could but the taxes was still high so we had to reduce the amount that he claimed so we will not have to owe too much. My case is a little different then yours because we are a family of 6 and I have mild medical problems and two of my daughters have asthma plus we are considered non-cunsumer debters because most of our debt is back taxes, we only had maybe $1500 in CC debt and no I am not missing any zeros LOL. I had a lot of medical and a few loans. So this may have helped our case as well.

[RickInMich]

Freshstart,

Can you (or anyone else) explain more about what you mean by never be negative on Schedule I and J? We're under the median, but I think if we list all our actual expenses, we're definitely going to be in the negative. Our expenses are more than our income for sure, even taking away the credit card payments. That's why we probably will foreclose on the house, too.

Basically, should we adjust our expenses to be almost equal to our income and never be in the negative there?

[AZgirlie]

Now what you need to do is fight, prove that your taxes are too high,

How do I fight this - submit ammended Schedules I and J? Claim "Special Circumstances?"

Thanks so much for your insight!

[freshstart06]

RichinMich, on schedule J make sure your disposble income is $0-$20. You can adjust your expense to fit your budget, Trustee don't like to see that you are still negative if you can help it. Schedule I and J is like your budget before you pay on debts ie credit cards, BK has to look like a benefit once the debt is gone not like you are still going to have problems. Many may not know this but even if you are under the median you can be consider abuse if you have way too much debt knowing you could not afford it. This is a red flag as well.

Azgirlie, Claim "Special Circumstances"... If your taxes is eating up your check then that is special circumstance only and I mean a BIG ONLY... if you claimed the highest amount in exemptions and it still eats up your check. If you are claiming 0 but have room to claim 2 exemptions and by doing this will result in disposable income then you will be looking at chpt 13 unless there is other circumstance in your favor. I will pm you lawyer that will help you for a very low cost like under $200 if you like.