If I dismiss my bk, what will happen....

[optimist]

I filed ch 7 end of July. After the 341 the US trustee stepped in and is forcing me to convert to a ch 13 or dismiss the bk.

If I dismiss the bk (and try to dig out on my own), what will happen in the following circumstances:

1. My home which I am no longer living (we planned to hand over the keys) is in the process of forclosure. Am I liable for anything on the unpaid mortgage, or does it just go away in the forclosure?

2. HOw about second mortgages?

3. In my prior business I had personally guaranteed a leased piece of equipment for 100K. I still owe 80k on that, they'll obvioulsy come after me for that, but if I have no assetts, what can they do, garnish wages? Or would they possibly take less than owed and accept a payment plan?

I would call these places and ask them myself, but they are currently under the impression that I'm a lost cause ch7. I don't want to wake a sleeping giant and let them know that I may change to a 13 or possibly dismiss the bk.


I am meeting my atty on Monday, but I'd like some feedback from this forum to get some idea before I see my atty.

Any feedback is welcomed.

-Rob

[justbroke]

The answer(s) depend on whether you're going to convert your case to a Chapter 13. If you go to a Chapter 13, you'll have the protect of the Automatic Stay, but also be subject to the Court. The Chapter 13 will have you living on a tight budget mandated and overseen by the court.

If you just go for straight dismissal... you are now at the peril of the creditors. Are you judgment proof? Yes, they can get 25% of your gross wages in most States.

Having wrote that, weighing the affects of wage garnishment versus a Chapter 13, may wish you pray for a Chapter 13. It's all relative.

1. My home which I am no longer living (we planned to hand over the keys) is in the process of forclosure. Am I liable for anything on the unpaid mortgage, or does it just go away in the forclosure?

Depends on the State you live in and the new Foreclosure Prevention Act (2008). You may or may not have to pay a deficiency. In California, for example, non-bankruptcy code prevents you from getting a deficiency on your primary "purchase-money" mortgage (loan). That is your original loan which was never re-financed and used to purchase the home.

2. HOw about second mortgages?

Same as first.

3. In my prior business I had personally guaranteed a leased piece of equipment for 100K. I still owe 80k on that, they'll obvioulsy come after me for that, but if I have no assetts, what can they do, garnish wages? Or would they possibly take less than owed and accept a payment plan?

Any one of those two questions are answered "Yes, maybe".

[BROKENN]

Can he dismiss and wait 3,4 or so months to show lower income?

Those debts are scary........

Will your income be lower OP? Under median? With expenses for no DI? Plus back debt I would think he could qualify?

[JRScott]

I've seen several folks here that the US Trustee objected initially to a chapter 7 and then after more documentation etc. backed off and allowed it.

What is the nature of their objection?

[optimist]

If I dismiss, I could potentially show lower income for the next 3 months with my employer, if I do this and they smell a rat, what do you suppose will happen?

Fraud charges?