Chapter 11 case converted to Chapter 7, I want to dismiss it ASAP...

[debee]

I think the "get an attorney" advice is good advice though. Despritfreya gave the same advice and he/she is an attorney with more awareness (as compared to run-of-the-mill forum members like me) of the difficulty you are in. Best of luck to you.

[afghanmaker]

Hello despritfreya....

I just wanted to clarify your statement:

"If you fail to cooperate with the Trustee you could face a 727 Complaint for the denial of your Discharge" - since I don't want to have my debts discharged, this point would be moot for my case, wouldn't it? I want to just dismiss this case.

Secondly, your point that "Such dismissals are rare but can happen" - you mean once you get converted into a Chapter 7, you can only get discharged and only rarely dismissed? Really?

[tcreegan]

Hi again afghanmaker,

600k underwater home, no other assets....the plot thickens.

There seems to be nothing for the creditors so that means the conversion was probably well-intentioned, thinking you would want to discharge the 20k of unsecured debt. (which might not be a bad idea)

If you are sure you want out of the BK business, you might contact the trustee and/or judge and let them know you don't want to pursue a Ch 7, that you know the consequences, and want the case dismissed. (consequences mainly being not allowed to refile for 6 months and a shortened stay on refiling) The trustee is the person who can dismiss a Ch 7 the easiest, and the judge is needed to OK it.

Good luck with this, hope it gets straightned out and you can go on with your life!

Tom in Colo

[TeacherMomma]

As someone who had their case dismissed instead of converting to an 11 (opposite of you sort of) I can say that the damage is done to your credit, so why not go ahead and let them discharge the 20K? Trust me, the damage is done - you will be treated as if you filed and went through with it and will forever be saying "no dismissed, not discharged" and to that you will hear "doesn't matter, it's pretty much the same". (Our credit scores were not that effected, but the filing made it so there cannot be another mortgage for another 2 years minimum, and we can't bank at certain banks, etc - so no matter how good your credit is, the mark is still there) Also, are you sure they cannot pursue the deficiency balance on your mortgage? I'm in CA too and when we were deciding whether to walk or short sale, there was a TON of paperwork we had to do about our loan being a non recourse loan (1st purchase loan) and not a 2nd, or refi etc, otherwise I swear the real esate attorney said we could be pursued for the deficiency balance. That being said, perhaps that is why they thought it might be best for a CH7 because in that case you would have the deficiency wiped I beleive.
Good luck whatever happens, I was pro se as well - tough stuff even for a Ch7 I cannot imagine an 11 (or else I would be doing it).

[HHM]

Hello despritfreya....

I just wanted to clarify your statement:

"If you fail to cooperate with the Trustee you could face a 727 Complaint for the denial of your Discharge" - since I don't want to have my debts discharged, this point would be moot for my case, wouldn't it? I want to just dismiss this case.

Secondly, your point that "Such dismissals are rare but can happen" - you mean once you get converted into a Chapter 7, you can only get discharged and only rarely dismissed? Really?

The funny thing is, your reaction to "candid" advice proves my point (arrogance in the face of reality).

In any event, to give you some guidance, No one can really say as to your particular case. But as was pointed out, when someone as a $1.5MM house, odds are, they have other assets that exceed the states exemptions for the various asset class. You need to understand that you will be rolling the dice if you do not cooperate in the chapter 7. One thing to consider, if you receive a denial of discharge, that means that $600,000 of negative equity in the property will not be discharged.j

[newbie2]

Hello Tom,

Yes, you are very close and Yes, I just want to get out of BK since my only intention was to save the home (I did file an objection to lift automatic stay but it obviously did not work). I do not have any other assets as my home was over $600K underwater. So I would like to get out of this BK..I am pretty tired of it already.

If you have a 2nd mortgage be very careful and consult an attorney. I believe California is a recourse state in regards to the 2nd...

[helpmeout]

If you have a 2nd mortgage be very careful and consult an attorney. I believe California is a recourse state in regards to the 2nd...

California may also be a recourse state if the first mortgage was refinanced. I remember reading something on one of these forums regarding how it was only the original mortgage that the bank had no recourse on, but did if it was refinanced.

[despritfreya]

I just wanted to clarify your statement:

"If you fail to cooperate with the Trustee you could face a 727 Complaint for the denial of your Discharge" - since I don't want to have my debts discharged, this point would be moot for my case, wouldn't it? I want to just dismiss this case. Secondly, your point that "Such dismissals are rare but can happen" - you mean once you get converted into a Chapter 7, you can only get discharged and only rarely dismissed? Really?

As to your 1st point, yes, if you do not want a discharge the issue would be moot. However, your Trustee will still go after all non exempt assets (of value), liquidate the same and pay what ever claims are filed. Creditors who are not paid in full either because they did not file a claim or because there were insufficient assets to pay 100%, will survive the closing of the case and can sue you. This may include the 2nd on your property (if I recall correctly you had 2 liens) as it is unlikely California's anti-deficiency statute applies to the 2nd unless the 2nd was also purchase money. You need to research California's statute.

As to your 2nd point. Yes, "really". One does not have the "right" to dismiss a Chapter 7. You can file a Motion and let a judge decide but if the Chapter 7 Trustee opposes the Motion, it simply will not be approved. Therefore, if you want out you need the Trustee on your side. Been there, done that for clients. Already know what will most likely happen.

Des.

[afghanmaker]

Hello All, just an update...

I have hired an attorney and he found out why my case was converted to a 7 instead of being 11. Anyway, thanks everyone for your inputs and comments (except the insulting comments the moderator made).

[justbroke]

Why was it converted to a Chapter 7? Was it out of pity to save you from a $600K deficiency, or was it because you have non-exempt assets. As someone who almost ended up in Chapter 11 myself, but have navigated successfully through the waters of Chapter 13 and a conversion to Chapter 7... I am here in disbelief that you tried it.

You always need to have the Trustee on your side and it reads as though you either didn't cooperate or you didn't know what you were doing.

[sassiebaz]

Hello All, just an update...

I have hired an attorney and he found out why my case was converted to a 7 instead of being 11. Anyway, thanks everyone for your inputs and comments (except the insulting comments the moderator made).

Yes, please share!

[wsy]

Hello All, just an update...

I have hired an attorney and he found out why my case was converted to a 7 instead of being 11. Anyway, thanks everyone for your inputs and comments (except the insulting comments the moderator made).

No insulting comments. They are trying to help you with information you give them.
Happy New Year!