Question Dismissal of a 13

[jwyoung66]

I am in a Chapter 13, and have been for three years. The case was filed pro se under a 7, then we obtained a lawyer and immediately converted to a 13. We never even went to court under a Chapter 7. Fast forward, we want to drop the 13. We told out lawyer and he submitted the paperwork last week. The trustee has not responded yet. Has anyone had any experience with voluntarily dropping a 13?

[shipo]

I've read horror stories about doing such a thing; most stories include their creditors rushing to pile on all manner of charges and interest.

[justbroke]

The question is why you would dismiss a Chapter 13 that will be done in, ostensibly, just two more years? As shipo eludes, this could become problematic. Smart creditors will "rush to the courthouse steps" to obtain judgments and record them as liens. That's not to say that all creditors would run to the court but it is an possibility. All of the accrued interest from 3 years, plus any bankruptcy and attorney fees will be added. I'm guessing most of the unsecured debt was sold to a junk debt buyer (JDB) and I consider them to be pretty sophisticated. The question will be how quickly they pounce and whether there are any statute of limitations issues (if not tolled).

I won't second guess your decision. Just want to make sure you understand the ramifications of your decision. You surely have some plan. The Chapter 13 Trustee will generally not need to respond to a motion to dismiss except in an exceptional circumstance related to the prior conversion from a Chapter 7. All Chapter 13s are voluntary so they can normally be dismissed and are summarily dismissed upon the court's receipt of the Notice of Voluntary Dismissal.

Welcome to BKForum.

[flashoflight]

How do you plan to repay all of your unsecured creditors in-full with interest backdated to the original chapter 13? You're not entitled to any of the benefits of the chapter 13 backdated to day 1 including zero interest.

[despritfreya]

I think there are 2 things we need to understand:

1. Why did you convert from 7 to 13? Maybe you didn't "qualify" for a Chapter 7. Maybe you were trying to save a home or car - something a Chapter 7 does not help you with. Maybe you were trying to keep a non-exempt asset. This info would be helpful.

2. Why are you unable to complete the Chapter 13 Plan? Loss of income, loss of desire to stay in, new debt? This would also be helpful.

Generally - at least in my district - a case converted from 7 to 13 does not get dismissed. It gets converted back to the 7 and the 7 Trustee is re-assigned to the case. Of course, if a Motion to Dismiss is filed and no one objects, that could lead to a dismissal instead of conversion back to 7.

Des.