looking to convert from 13 - a few questions

[boomerkae]

My husband is no longer working, so I'm hoping we can qualify for a ch 7. With my income alone, we are under median. I'm two payments into the 13, waiting for my confirmation in about 2 weeks. I owe the trustee updated income showing the decrease from my husband, and was waiting until my annual increase appears (I'll see it Tuesday).

Questions:
Do we still need to do 6 months of lookback for income?

I'm a little confused - I know I'm under median, but without hubby's income (he'll be a stay at home dad), and cutting some expenses - and moving from a mortgage to a cheaper rent, I am showing up negative comparing expenses to income. How does this factor in? Do I need to do this?

[JvilleGarden]

We went through a similar situation. We filed a Ch 13 and were 10 months into the plan when she became unemployed. With such a drastic change in income (50% loss), we were WELL under the means test, and were able to convert to the Ch 7 quickly through our atty, who filed a motion to convert. We had to go through another 341 meeting, and fill out some new forms, but it was a fairly easy and painless process. In our state, the exemption limit was smaller for the Ch 7 than it was for the Ch 13, but these are things your atty can discuss with you.

Good luck!

[may]

We just converted too. I had to list all of my expenses and I was in the red. And yes, they wanted 6 months of pay stubs from us again. (although I think last time it was 6 stubs not 6 months.)

Good luck!

[boomerkae]

THanks to you both. I'm showing up in the red with my projected expenses and wasn't sure how that would fare for me. I'm about to submit all my updates to my attny right now! I really hope we can convert!

[JvilleGarden]

We filed our Ch 13 in April, 2010. Due to my wife's job loss, and 50% decrease in income, we were able to convert to a ch 7 through our atty. The trustee only required 2 months' paystubs from us, due to the loss of income. We also had to re-list our assets, and explain some of the items we sold, and what the proceeds were used for. It was a very simple process. We had to go through another 341 meeting, but it was a very quick and painless process, too. Good luck!

[justbroke]

If you can, it's always best to convert rather than dismiss and refile. In both cases, you still need to file a Schedule I&J and new Means Test (B22A) to demonstrate that you can't afford to fund a Chapter 13 (no disposable income). Many of us were able to just convert, but that is not always an option.

Worse case, you allow the Chapter 13 to dismiss and then you refile a Chapter 7. Find out how much your attorney is going to charge you to convert.

[boomerkae]

Worse case, you allow the Chapter 13 to dismiss and then you refile a Chapter 7. Find out how much your attorney is going to charge you to convert.

I'm not (unfortunately) 100% sure why, but we had to dismiss. I think it is in part so we can keep our tax refund to help with getting cars repaired and help with our moving expenses. We'll be paying the regular Ch7 fee to file for 7. I'm super nervous about having creditors come after me. THey want us to wait until June, I'm hoping to file sooner. Of course, I dismissed a week ago Monday, and two days later, I get in the mail papers from the mortgage co, and two days after that, a plea from them to the court to lift the automatic stay. ANother creditor today in the mail is threatening to sue - I don't think they ever recognized my bankruptcy even after notified and I called them.

Myattny had told me that we'd be safe in the house til June without doing anything; now I'm not sure. Should be OK though, we have found a place to rent, but we were hoping to do it a little slower.

Back to super nervous.....

[justbroke]

Actually, the Chapter 7 "estate" is not entitled to your tax return, when you're in a case converted from Chapter 13. The Chapter 7 "estate" is established when the case was filed, so that's when the original Chapter 13 was filed!

I'm sure there are Trustees there that would argue it, but almost all Chapter 13s "vest all property of the debtor back to the debtor upon confirmation". Additionally, the terms of a Chapter 13 end upon conversion, so the estate can't impose the terms of the Confirmed Plan, such as those requiring turnover of refunds. Additionally, in most Districts, the new Chapter 7 Trustee is bombarded almost IMMEDIATELY after conversion with a Motion to Compel Turnover of any monies that the Chapter 13 Trustee turns over to the Chapter 7 Trustee! Yes, a little complicated and not what you were asking, but I just wanted to post this for others.

Since you're dismissing and refiling, now you will have created a new bankruptcy estate, and the tax refund would be subject to the powers of the Chapter 7 Trustee and part of the estate, unless exempted.

[boomerkae]

Where can i find the amount of exemptions we can have? I think we were over in our ch13.

How does it work with 7 if we are over? There is property we have that we don't want - can we sell it to pay? Can we just give it to the trustee and let them liquidate or do we have to do it?

[justbroke]

How does it work with 7 if we are over? There is property we have that we don't want - can we sell it to pay? Can we just give it to the trustee and let them liquidate or do we have to do it?

If you are converting, then it's usually not an issue unless you were over in your Chapter 13. Then a calculation needs to be made as to whether you paid "at least that much" to the unsecured creditors during your Chapter 13.

In this case, this is a question for your attorney. You should be able to read your exemptions on Schedule C.

[bondyang1224]

HI im reading thru all your post and i just have some questions regarding my case, we're on chapter 13 for 1 1/2 now and were contemplating on conversion to chapter 7 since our household number increased from 5 to 7( my parents came in as immigrant 18 months ago)and we decided to give up the house since there is a sinkhole.On means test we will not qualify unless i quit my job and take care of my 3 kids instead of paying daycare, will that be feasible and what are my chances of getting approve.. my lawyer will not modify the payment because he said that i voluntarily let my parents live w/ me(i petitioned them 2 yrs before we file so i have to choice).. Thanks in advance...

[JvilleGarden]

Our conversion from a 13 to a 7 was similar to your situation. When we filed, my wife and I were both working, and we were keeping the house, cars, etc. We were just slightly over the qualifying point on the means test. About 6 months in, we found the house needed a $5k roof, and that my wife's job was causing anxiety issues, which made it practically impossible for her to work. She quit her job, and then we converted to a ch 7. Our attorney charged us $25 to convert (the court fee). We were never asked why she was no longer working, just if she was anticipating going back to work, which she isn't. The Ch 7 was a no asset case, and went super smoothly.

Hope this helps put your mind at ease, and the best of luck to you!

[bondyang1224]

Thanks JvilleGarden for your reply, i appreciate it.. how long did it take for you to move out of your house after he conversion? and did they take your car right away?? i just want to have a clear picture of it so we can prepare ourselves..Thanks again in advance..

[jetsfan2010]

Thanks JvilleGarden for your reply, i appreciate it.. how long did it take for you to move out of your house after he conversion? and did they take your car right away?? i just want to have a clear picture of it so we can prepare ourselves..Thanks again in advance..

Not sure about all the questions you posed, but I believe re: the car 45 days after your ch 7 341 if you list in your statement of intent you plan on giving up the car, they can pick it up.

[bondyang1224]

thanks jetsfan2010, were on ch 13 but contemplating on conversion to 7 , will be giving up the house so i want to know if we have to move out right after conversion or wait till dissmisal??