Chapter 7 Conversion Scenario

[bcvw]

I got a call from my attorney to discuss my Ch13 confirmation. He is meeting with the trustee next week to hammer out the plan.

Anyway he commented that he had gotten my email from last month about my pending job loss at the end of May. He asked when I would go on unemployment insurance and I said August 1 after my severence ran out. He asked if I would be opposed to a Chapter 7. I said that that would be awesome if it could be done.

He said that if I lived off UI for a couple of months, we could abandon the 13 and refile a 7. That got me thinking that I might not even want to look for a job until then. With my wife's income and UI, we'd be under the median at that time.

It would seem that to file a 7 we'd have to pass the means test for 6 months prior though. I'd think that would put us over the median again.

Thoughts?

[woeisme]

I think if you are in a 13 and try to do a conversion, that the 6 month look-back doesn't apply, they base it off of current income. We are going through a similar scenario, only my husband is on disability, not unemployment. Our lawyer says our trustee is going to object if we try to convert right away though, even tho we are now under the median. So she suggested a 3-month suspension of the CH 13 payments first, then if the situation remains unchanged, to try for the conversion. These things are so variable from trustee to trustee, I wouldn't expect this to always be the case, just letting you know what our lawyer recommends.

[laurannm]

I could be wrong but I am pretty sure you still have to pass the means test (i.e. the 6-month look back still applies) even in a conversion.