What is conversion? Also, need means test input

[empowered]

Hi. I'm a newly registered member. I thought I'd be posting a few questions today on the thornier forms and then be able to file Chapter 7 next week but it appears that I may have miscalculated my income on the means test I did a month back -- today's calculations show me as being about $700 over the yearly median income for a one-person family in my state.

My situation is this. After a period of being out of work in another state, I was forced to file Chapter 13 (having found a job again) when the creditor on my credit cards refused to grant me a payment plan. The Chapter 13 was filed just a few months before I returned to a prior state of residence; I had to fly back for the hearing. This was in late 2008 to early 2009.

My financial circumstances immediately changed after the move -- less money -- but I continued with the payment plan until late 2009. Since I am not a homeowner I was also getting kicked around in the rental market so had to move a few times and still might have to move again depending on what the owners of my current residence do. Also expensive.

Anyway, I fell behind with the third move or so and then got laid off in February 2010. The trustee dismissed my case (no six-month rule should apply since it was dismissed for lack of payment alone) in the other state before I knew about it. (I trusted that an old friend would tell me when the PO Box she'd allowed me to use was no longer an option, but she did not and I lost control of things.)

I'm in another state so I concluded based on a few attorney contacts that I should just file as Chapter 7 and move on. It seemed like conversion was not an option since I am in another state and since the case was dismissed. Not to mention the fact that I am loathe to have anything to do with that bunch of attorneys again anyway.

QUESTION: Am I right in thinking that conversion is only an option when you have an open case and not a dismissed case?

QUESTION: Am I right in thinking that moving to another state limited my option to convert? (I wish my attorneys would have advised me better here but then, had it been feasible to change attorneys before the filing, I would have at least done that since they gave careless advice, were nasty, made a big stink when I wanted to think about the Chapter 13 paperwork overnight before signing -- even claiming that no one had ever hesitated to sign in the past, sent my paperwork to a complete stranger unknown to me, and so on.)

Okay, sorry for the venting. This is my first post and I guess I can't help it a bit.

Given the whole situation, when I examined my filing copy of the Chapter 13 paperwork and saw how many of the forms were duplicates, I realized I would be comfortable in going pro se for the Chapter 7 filing.

But I just ran the numbers, as I said, and I'm about $700 over the median for my state.

What I did was this, having checked the Nolo book and having looked on one or two other good sites. I added up the gross income I made in January and February before being laid off. The entire gross amount. I added to it, the unemployment income that I have been living on since being laid off, some $9900 (my state generously provides unemployment that you can sort of live off of). That was six months.

Then I divided by 6.

The monthly was over $4000. Multiplying by 12 got me above the $51,000+ or so that my state allows as a median income for one.

QUESTION: That's it, right? I'm doing the means test right? I think before that I averaged the high amount and the lower amount (the monthly unemployment) before multiplying by 12. But today it looks like that was wrong.

If so, then it looks like I need to wait until August to file and take six months previous from February to July to use for the means test. If my understanding is correct, a month means the end of a month -- not every four to five weeks depending on when in the month you want to file.

If I was able to convert from the Chapter 13, it looks like I would have already had the option to file since it sounds like you don't have to do the means test.

But I don't think I could without reopening the 13 and getting the support of the trustee and attorneys in the old state for a conversion. QUESTION: Does this sound like a reasonable assumption?

I'm pretty sure an attorney would be required to jump through all those hoops. And when I look at the copyright of the bankruptcy form software on the pages of my old filing and consider the lack of interest and care shown by the attorneys I used in the other state, I just can't see going that route until I have to. I'm not poor enough to get out of filing fees so if I can't convert, I have to spend $300 while on unemployment to file -- I can't pay attorney fees again on top of that.

Well, the username I chose is "empowered" but right now I'm feeling pretty disenfranchised. No use with asking any questions about individual forms until I figure out what to do about this means test obstacle.

QUESTION: Can anyone tell me if the assumptions I'm making are correct?

Sorry for the long post. I guess venting is unavoidable in situations like this. If I had it to do again, I would not trust my attorney to know what I need to know and to properly look out for my interests. I would learn as much as possible about bankruptcy so that I could appraise the work my attorneys did. For whatever it's worth, this is all I can give in return for advice that you have for me.

Thank you.
(dis)empowered

[newbie2]

QUESTION: That's it, right? I'm doing the means test right? I think before that I averaged the high amount and the lower amount (the monthly unemployment) before multiplying by 12. But today it looks like that was wrong.

If so, then it looks like I need to wait until August to file and take six months previous from February to July to use for the means test. If my understanding is correct, a month means the end of a month -- not every four to five weeks depending on when in the month you want to file.


(dis)empowered

I don't know how a conversion is handled when you've had a 13 that was dismissed for non-payment, so I'll leave those questions for those that know the answer.

As far as income look back, you were correct. If you file in August, then February through July income would be used. A month does mean the end of the month. (February 1 through July 30 in your example)

[empowered]

Hi. I wrote this post over the 4th of July weekend -- probably a bad time to get much response. I'm hoping that someone has some information about the impact of moving out of state during a Chapter 13 plan. I searched for this information but nothing addresses my question, which is: When you moving to another state on a Chapter 13 plan, do you lose some options that you'd have had if you remained in the same state, like the ability to convert to Chapter 7?

In my own case, my 13 was dismissed so I am filing anew as a Chapter 7 in my current state. But I wonder whether the laws provide for an out-of-state conversion to Chapter 7 since the guidelines for filing the 7 in the first state do not apply to the second, the attorneys generally cannot practice in the second and if you're a resident of another state.... If conversion is actually a new petition, you can't file bankruptcy in a state in which you're no longer a resident, right?

Can anyone clarify this? I think it would be good for others who have to move out of state after filing to know if this alters the parameters of their case or limits their access to conversion. My search only produced discussion about whether one is permitted to move out of state for the most part.

Thank you.

[SMinGA]

As far as I know you have only 2 weeks to file a motion to re-instate a dismissed case, and cannot convert an already closed/dismissed case. You'll have to file a new case.

For median income - the #s changed 3/15/10. Make sure you're going by current median income figures, not whatever was in effect when you originally filed. As for your dismissal (and finding out if there is a 6 month lock out on being able to refile) look at your dismissal notice. It will either say dismissed with prejudice or dismissed without prejudice.

Correct on how to calculate 6 mo lookback. If you intend to file in July, add Jan-June and divide by 6. That is your average monthly income.

Being over median does not mean you cannot file ch. 7, it just makes your case get a bit more attention perhaps. But if you're on unemployment and your schedule I and J (actual income, actual expenses) reflect very little DMI - then you probably will not have trouble. I doubt there would be a good argument to push you into a ch. 13 on unemployment income alone.

[empowered]

Thanks for your response. Can I take your response to mean that a person who is a resident in one state and no longer meets the residency requirements of the state in which they filed can convert to a Chapter 7 from a Chapter 13 if their case is active (not dismissed like mine)? I wonder how the residency requirements would work with the median income requirements, the exemptions and so on.

I'm interested in finding this out even though my own case is dismissed because I was very clear with my attorneys that I'd be moving out of state and would have preferred to be fully informed about how assuming residency in another state would affect my options during my plan. I knew my income would change after my move so did ask about how this would affect payments to the trustee. If I'd been told that my options would have been restricted, I might have waited to file. I actually took care of everything pretty quickly after the credit card companies made it clear that they would not work with me on a payment plan.

Thanks for the other information as well. I'm feeling attention adverse so will probably wait what is now another three weeks to file. I did request a copy of the dismissal order and this new filing comes six months after the dismissal anyway at this point even though I'm told it was made without prejudice (I should open it and double-check). And I've got the other parameters under control, like median income, which is different in this state. I just wish that I'd known I could have researched things like this before I filed the 13, because my attorneys made it sound like I would get a better deal filing in that state but as soon as I checked for the median in my new state I found out that that was not the case, at least for the median income. Knowledge truly is power when it comes to these things. I figured that the advice of an attorney was all I needed so I chose one from the Nolo website.

Exceptions may be another issue but I haven't fully checked that out though months back when I did some preliminary research it looked like I should use the same exceptions for the 7 as I did in the 13. I haven't been in my new state for a full two years yet and the exemptions taken in the 13 are probably still under the limits for exemptions in my new state for a Chapter 7 filing. More research to do on that point though.

Thanks again.
Trying to make sure I'm fully informed this time around...

[SMinGA]

Conversion is only an option when there is an open/active case. Topics like moving out of state are really best discussed with the attorney before/during/after the move.

Moving would not cause the case to automatically be dismissed. I believe one can have a case transferred from one district to another, but not certain of how that works. It is also not terribly uncommon to amend one's plan, due to changes in income/expenses. Those are topics to work out with the attorney - though it seems it is not always easy to get the atty to actively work the case after initial filing/confirmation. Often takes face to face, sit down meetings - and those are difficult when you're no longer local to the atty.

[empowered]

Just to clarify, my case was dismissed for failure to make payment plan payments. Unfortunately, because I used a friend's P.O. box as an address and they discontinued it but somehow didn't mention that to me. I didn't know about the dismissal until I called to ask months after sending a letter saying that I'd been laid off. The attorneys had had my updated information for months by then but did not contact me to tell me about the dismissal.

If anyone has more information about whether conversion is a viable option for open cases from out of state, I would be happy to see that here for others who should consider it as they decide when and where to file. When I tried to ask my attorney in early meetings with them about how the move would affect me, I was told only that they weren't licensed to practice law elsewhere. There was so much going on my life at the time that I trusted them to tell me whatever I needed to know -- this was my first experience retaining an attorney. And because I'm careful about where I get information from over the Internet, I did not try to avail myself of the truly good resources that do exist about bankruptcy on the Web. Hopefully someone else can learn from my mistakes before they duplicate them.

I saw a post on this forum from an attorney who was saying that he (I think) preferred his clients to know as much as possible about bankruptcy. I wish I'd had an attorney like that. Perhaps they would at least have told me that though they could not advise me on particular issues, that they existed. I'm a pretty capable researcher when I know there's something I need to find out.

Ah well. C'est la vie. Thanks again.