Old Law : Chapter 13 conversion to Chapter 7

[kags1969]

I am not thinking about this but I do have a question about it should something terrible happen (ie lose a job) during my Chapter 13.

I filed under the old law, has anyone personally converted from 13 to 7 after the new law took effect. I read the law and it allows for conversion, I was just wondering which law would govern, the old or the new.

Kags

[WhenThePawn]

I wonder about this, too. I'm praying like mad that nothing goes out of whack for my remaining 1.5 years in Ch 13...still can't help but wonder "What if....?" I hope Ch 7 isn't the only remaining option if I lose my job or something. Do trustees allow lower payments for a few months? Do they renegotiate? Or do they stamp a big old 7 on your forehead as you kiss your house goodbye?

I hope I didn't hijack your thread too much, Kags.

[SinkingFast]

If you have an income/expense change you can apply to the Court to have your payment plan ammended. The attny that filed your Ch 13 for you is the person to handle that. When attnys sign on for a Ch 13, they are agreeing to be there with you and for you to the very last payment.

If you have to convert to Ch 7 for some reason, Old Law rules would apply. Since you started your BK under Old Law, you would convert as an Old Law Ch 7.

Trustees can adjust payments to allow for things that come up during the plan. But you need to be honest and up front and notify them as soon as possible. Don't wait until you miss a payment and then say, "Oh, by the way,........" That won't cut it with a Trustee.

If any significant issue, such as job loss, illness, or disability arises, contact your attny ASAP and let them know what's going on. Your attny needs to contact the Trustee ASAP as well.

I'm not sure how a job loss in Ch 13 is handled. To my knowledge, no one here has posted about going thru that type experience.

[bkbiker]

I can just picture the standing chapter 13 trustee with his/her big rubber stamp labeled #7 in his hand just waiting; Next debtor please comes forward!

If you have a genuine hardship, there is the possible of a “hardship discharge” I checked my trustee specs , and he has issued a total of 4 hardship discharge for last year out of the 7000 case he has going.

If your plan was shorter than 60 months than you may be able to extent the payment up to 60 months.

If you have a brief loose of income, than you may be able to arrange for a lower payment followed by increased payment. How-ever your plan has to pay to the creditors at least the amount that would have been paid under chapter 7. I would think it to be rather difficult to reduce your base payment amount.

Most Trustees’ will try and work with you because this would be in the best interest of the creditors for you to complete your plan. The further behind on your plan the less likely they will try and work with you, so call your lawyer as soon as you know.

Good luck,
bkbiker

[chewy96]

Conversion Under Old Law

I filed for Chapter 13 in September of 2005, mainly due to the fact that I wanted to keep my car. My chapter 13 payments were scheduled to be $600 per month.

I got behind on a couple of payments. The trustee filed a motion to dismiss. So in June 2007, we filed an amended plan to reduce my payments to 375 and to have them deducted from my wages.

Something went horribly wrong with this plan and my case was dismissed, even though after I found out that the wage deduction hadn't occurred and overnighted my payment to the trustee.

Immediately, my attorney filed a motion to reinstate and my court date is set for September 24.

Then last week, my car was repossessed, which was 3 days after receiving the dismissal letter.

We are still moving forward with the motion to reinstate on the 9/24, with plans to convert me to a Chapter 7, under the old law.

Has anyone had a similar experience to this?? I am so nervous!!!!