Converting a 13 to a 7 after death of spouse

[mosassie]

My parents living in FL filed chapter 13 back in May 2009 and did not include the mortgage or the equity line of credit they held. It was discharged in Oct 09 and payments are being made. My father passed away om Dec 26, 2009 and my mother will not receive the military pension they were living on only her SS of about 880.00 a month. She can not make the mortage payments and will lose the house. Questions: Can she convert the 13 to 7 and add the house? She will be receiving life insurance proceeds in an annuity (not even a 1/4 of what she needs for mortgage) can they seize this money if she converts to a 7? Is there a time limit you have to convert a 13 to a 7?
Thanks for your help!

[AngelinaCatHub]

I'm sorry for you about your and Mother's loss.

They cannot touch the insurance annuity. That is totally exempt from any type of garnishment (except stupid IRS of course).

There is no time limit to convert. I wish you and Mom well. 'Hub

[kvangild]

I always thought a military pension lives on with the surviving spouse?

[nerves]

I would check on the military pension as well. My mom collects this since my dad has passed. She may be able to get one or the other (SS or Military). I believe that is what my mom was advised. Since the military was more - she is collecting that.

[mosassie]

Thanks for the kind words Hub. The military pension was not set up as a spousal benefit. My biggest fear is that they will take her life insurance proceeds if she converts the 13 to a 7. We are waiting a call back from the attorney that handled the 13 but we're not even sure she should mention the insurance. I would like to think that since she hired them that they would do what they could to protect the last dime she has.

[anime-chicka]

Thanks for the kind words Hub. The military pension was not set up as a spousal benefit. My biggest fear is that they will take her life insurance proceeds if she converts the 13 to a 7. We are waiting a call back from the attorney that handled the 13 but we're not even sure she should mention the insurance. I would like to think that since she hired them that they would do what they could to protect the last dime she has.

That doesn't sound right. Does she have a POA or someone who can contact DFAS to verify this? My mother was given the same runaround after my father died. I had to find their marriage certificate from nearly 40 years ago to prove that he was married to her at the time he was in the service as well as fill out a mountain of paperwork regarding his time in the service. All in all, it took about a year before it was all taken care of. The downside was that the benefits were not retroactive, so she didn't have any lump sum paid to her (and she could have really used it too).

[mosassie]

Mom's meeting with the attorney tomorrow to convert her 13 to a 7 and add the house. I have a few questions: Will she stop paying the mortgage right away? Will she have to maintain the insurance on the house, if so for how long? When can she expect to have to move out? Since her payments to the trustee she is making for the chapter 13 was based on her's and my father's disposable income, will that amount be adjusted (she lost dad's income) or will she just have the attorney fees to pay?

[mosassie]

Mom met with the bk lawyer and they are going to amend the chapter 13 to add the house. She has been instructed to stop paying the trustee and also to stop paying the mortgage. She will have at least a min of 1 year to move out if she needs the time. You were right Hub, they can not touch the life insurance proceeds from my father's death that she received. She wants to move out here to MO and live with my family until she can find a place of her own. I told her when she meets with the lawyer to find out if she has to stay in FL until the bk and foreclosure are complete. Would anyone know the answer to that?