Chapter 7 switching to Chapter 13 ??

[dendinar]

I have been reading this forum for sometime and never posted, but today I visitied my attorney and now I a confused. Some history. I had an unsuccessful business venture, was unemployed, and used credit cards for some time to try to save the business, and for personel issues. Need I say more, and my attorney he has been advising me to go Chapter 7. I found employment 2 months ago, making $70k per year and now he is suggesting that I go Chapter 13. He says I will still be well below in the means test, and at best only pay $100-$200 per month, and potentially be able to work a deal with the bank to save the house, again now that I am employed? My questions are: Does this make sense? Why not go Chapter 7 and still try to work out an arrangement with the bank and pay nothing? I am sure I will have more questions after I receive replys, but this will get me started. Thanks

[whatsnext]

Are you behind on your mortgage? The attorney may be trying to make it easier on you by filing chapter 13. I was behind 1 1/2 payments when I filed and my attorney gave me the option to file a 13 stating that the past due payments would be stretched over the 60 months versus trying to catch-up by the time a chapter 7 discharged.

[dendinar]

I am behind in both the mortgage as well as credit cards. I thought that was why you filed bk.

[dendinar]

Do you have to be current in your mortgage in order to file bk? Do you have to be current in your credit cards to file bk? Do you have to be current in your taxes to file bk. Thanks.

[music12]

Do you have to be current in your mortgage in order to file bk? Do you have to be current in your credit cards to file bk? Do you have to be current in your taxes to file bk. Thanks.

no.

you don't have to be current on credit cards to file bk.

you don't have to be current in your taxes to file bk, but those generally won't get discharged unless old; see sticky on federal taxes.

you don't have to be current in your mortgage to file bk; in some cases the bk can help you keep the home and that's one of the common reasons people file in the first place.

[CH33 Paralegal]

If you file a CH7, you're going to have to show NOW how you're spending all of your money without having any left over. If you have something left over, then the court will say that the left over amount on a monthly basis should go to the unsecured creditors.

Also, the longer you wait to file, the more and more income is going on the means test from the last 6 months. Not sure about your county and family size, but if you're generating too much for your county and household size compared to national standards, a CH7 may become infeasible at that point.

[CH33 Paralegal]

honestly, if the lack of employment was what was going to make you file, then I'd say problem solved.

[whatsnext]

Do you have to be current in your mortgage in order to file bk? Do you have to be current in your credit cards to file bk? Do you have to be current in your taxes to file bk. Thanks.

No, you don't have to be current. However, the way my attorney explained the mortgage situation is that at the end of a chapter 7 the mortgage company "may" want expect you to get caught-up rather quickly. If you cannot work it out with the mortgage company they "may" foreclose. In a chapter 13 the past due mortgage payments would become part of the payment plan. So, if it seems like it would be rather difficult to become current with the mortgage after the bk, then a 13 may be a better option. I have chosen to file 7 and am working diligently to catch-up on the mortgage payments within 3 months, hopefully prior to the bk closing.