I am in the middle of converting my Chap 13 over to a 7 to erase all my debt. My wife totalled our car after we filed the first chap 13 and we were not insured. So my lawyer said we could convert it to a 7. But we want to save our house...we are behind on it. He said after we get a discharge in the 7 and the house wasn't sold yet we could hurry and file another chapter 13 and save our house. Has anybody ever heard of this? I am just afraid that they will move quickly while we are in the chapter 7 and sell before we can file the chapter 13. How long do we have.
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We were also in a 13 but after a couple job losses could not keep up with the regular mortgage payments. Our lawyer also suggested converting to a 7, then doing a 13 again for the arrears. We did convert to the 7 but decided at the last minute to let the house go in the 7 and not do the 13 just because we couldn't financially handle it even though we're both employed now. It was a big decision to make, but I know it's better for us in the long run.
As far as how quickly they'll sell the house I believe depends on the state you're in. We're in Illinois which is a judicial state and it has to go through the courts, so considering we converted to a 7 November 1st, we're still here and we're looking at not leaving for another couple of months according to the mortgage company as there has not been a date set yet. As a side note, we filed 13 originally to save our home as the foreclosure process had started for us 3 years ago. The 13 saved us for a while, but unfortunately circumstances caught up with us. So now we're looking for a nice rental.
Good luck! -
Thanks for your input....I am in a Judicial state (KY)...so hopefully it will work. My wife wants to keep the house even though the arrears will be $400/month. It stretches the monthly budget very tight...but she wants our kids to grow up in this house.Comment
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I don't think you can do this anymore due to the new laws in 2005. What you're suggesting is called loosely a chapter 20. I think there is a set time between when you file a chapter 7 and when you can file a chapter 13.
From a legal website: Chapter 7 bankruptcy can be filed eight years following a previous Chapter 7 filing and six years after a previous Chapter 13 filing. Chapter 13 Bankruptcy can be filed four years after a previous Chapter 7 filing and two years after a previous Chapter 13 filing.Comment
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Well, I'm not sure about the timeline, but I do know that our case was converted 2 1/2 years after we filed the initial chapter 13, so we were definitely past that 2 year timeframe and could have re-filed the 13.
I would just double check with your lawyer about the timeframe if you can re-file the 13.Comment
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Right...Converting a 13 to a 7 is one thing, but I think there is a set time (six years) that you have to wait before filing a new 13. It wouldn't be re-filing your original Chapter 13 because it was CONVERTED to a Chapter 7.
They set this in place as many people abused the system before 2005 by filing Chapter 7 to erase their unsecured debt, and then a Chapter 13 to strip their secondary liens on their primary residence effectively doing a 0% payback on their unsecured debt in the 13.Comment
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Yes & No.
In order to receive a ch. 13 discharge, you must file the 13 no less than 4 years after the ch. 7. But using a 13 to resolve mortgage arrears will work, regardless of when the 7 happened. There will simply be no discharge (and nothing to be discharged) at the end of the plan. The unsecured debt was already discharged in the 7.
I don't believe one would not be able to strip a 2nd in a ch. 13 just after a ch. 7. The lien strip would create unsecured debt - but could not be discharged.
One could NOT file a 13 after a recent 7 to strip a 2nd. That would create unsecured debt, which would not eligible for discharge.
Originally posted by neorecon View PostGet mortgage modified: DONE! 7 months of back interest payments amortized, payment reduced over $200/mo
(In the 'planning' stage, to file ch. 13 if/when we have to.)Comment
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The timelines only refer to cases filed that result in a discharge. If dismissed, you can refile as long as your dismissal did not put a time limit on refiling. (Known as dismissal with prejudice I believe.)
Originally posted by imbroke2 View PostGet mortgage modified: DONE! 7 months of back interest payments amortized, payment reduced over $200/mo
(In the 'planning' stage, to file ch. 13 if/when we have to.)Comment
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