conversion qualification question

[dovette7]

I've tried and cannot find the law on this so if you know or could direct me that would be great.

We're in a Ch 13. Husband makes huge money but could be let go and there is no way he would be able to find another job making that much. So I've read online about Hardship discharges and I understand that however I've also read that you can convert to Ch 7.

Here in the forum, I've read that you must still qualify to convert to a Ch 7 however online I've read that you do not have to qualify if you are converting.
Could someone direct me to the law on this?


I do not work so If he gets fired, and we cannot convert, then could he get a job making under the median and wait 6 months to then file a Ch 7? All property is covered under exemptions.

[lrprn]

I've tried and cannot find the law on this so if you know or could direct me that would be great.

Here you go, Dovette - it's not the specific law, but close enough - a bk lawyer's blog about converting a 13 to a 7 - http://www.************************/...o-a-chapter-7/ .

Here in the forum, I've read that you must still qualify to convert to a Ch 7 however online I've read that you do not have to qualify if you are converting. Could someone direct me to the law on this?

From the US Courts Ch 13 webpage, here's the scoop about a Ch 13 hardship discharge http://www.uscourts.gov/bankruptcyco....html#hardship -

The issue here could be that your husband's job loss is not likely to be considered permanent and long-lasting. Depending on what employment he finds, modification of your plan could still be a possibility.

Another complication converting to a 7 is that some debts that are dischargeable in a 13 are not dischargeable in a 7 (same URL) -

I do not work so If he gets fired, and we cannot convert, then could he get a job making under the median and wait 6 months to then file a Ch 7? All property is covered under exemptions.

You may not have to wait six months to file Ch 7 - just until his averaged income over the last six months back drops below your state's median income for your family size.

[t-jaybk13]

My husband got in a car accident last month and is currently on Medical until May 31st and he will probably not return to work since it has put him on stress leave. We told our lawyer this and he said that he's going to see if that brings our income to a plan payment less than $100 and will try to convert us to Ch. 7. From what I understand, it's considered another filing on your credit report. But for us, it's beneficial...since we won't have to pay our debt back (except for taxes and student loans, of course).

I'm don't know much about the hardship discharge, but if you wanted to convert to Ch. 7 your husband could opt for a lower paying job for 6 months (just look at your Schedule J and he has to make what you have in the column for Expenses is). Since your plan payment is all your disposable income anyways, might as well make less and get converted to Ch. 7 and be free of the debt. It is an option that I've read other BK-Form bloggers do.

I believe once you've been discharged, he can go get a higher paying job. That's what I was planning to do since I make the bigger portion of our income. But now that this happened to my husband, just my income alone will put us under the median income for a family of 2 in CA.

How likely will your husband be let go from his current job?
What did your lawyer advise?

Good luck to you.

[dovette7]

Not sure about his job. The industry he is in is hospitality. With the economy, he's afraid no one is going to travel much less buy vacation property. So we are just waiting and seeing.
I have not asked my attorney, because at this point I don't believe anything they tell me. There have been many issues with them so I'm trying to do research on my own for now. If husband gets fired, I'll ask then I guess.