Ch13 to Ch7; money Trustee is holding

[ch13bkWA]

Hi all. I've been looking around this board for a while now, great people and advice here! Now I have a question....

My wife and I filed ch13 under the old law back in October of 2005. We were confirmed 2/17/2006. Right now, she has $345 deducted from her paycheck every 2 weeks and I get $272 taken out every paycheck (2x monthly). The NDC website is showing that the trustee has a "bank" of $4700-ish that is just sitting there, waiting to be paid out. Right now, the only thing being paid on by the Trustee is our car, which is the only secured debt. We also rent our house ($1500/month).

On 8/14/06, we were blessed with a beautiful baby girl. My wife is now on Maternity leave at 60% pay for 4 weeks, then 0% pay for the remaining time. We've contacted our atty and he said to convert to ch7 ASAP. The problem for us is that if we continue with Ch13 at our current plan, we won't be able to make the payments when my wife is at 0% pay. Alternately, we can BARELY afford to pay the atty the $750 he requires for conversion.

Now my question...if we convert, we were told that the money the trustee is holding will come back to us. About how long does it take the trustee to get that money back to us? That money will definitely help out while my wife is on maternity leave.....

Thanks-
Matt

[Jman30]

Matt,

First, congratulations on your baby!! That is wonderful!

Couple of things.....I was in your shoes just this past May. My wife and I had a baby girl on May 20th. My check was basically wiped out by the Chapter 13 payment. My wife's income during her maternity leave was 75% for 8 weeks, then 0% for the rest.

First, I would push your attorney to modify your plan. Your financial situation has changed. Your wife was not pregnant when you filed, so this is an unforseen situation. Your attorney just telling you to go to Chapter 7 ASAP sounds like he wants the $750 fee more than the simple task of modifying the plan.

Question: Is your wife planning on going back to work or will she be staying home?? If she is staying home, then maybe a Chapter 7 would be better. If she is planning on going back to work, there is no need to convert to a 7 just because a few weeks. Your attorney to can file to skip a month of payments or get it temporarily modified.

Congrats again on the baby! Hope you are getting some sleep!!!!!!!!!

[Jman30]

Hey, it dawned on me that I didn't answer your question about the money coming back from the Trustee.

Others here can give better advice on this...but I would assume they would keep the money and use it pay creditors.