Question about converting

[Newday1]

If someone files for chapter 7, needs to convert to chapter 13 after / during 341 and then after they are in a chapter 13 circumstances take a turn for the worse and the individuals can no longer afford chapter 13 payments am I thinking correctly that the below are on the table as options?

1. ) Can the attorney try to convert back to Chapter 7 - or is this not allowed as the individual has recently filed a chapter 7 even though it converted to 13?

2.) Dismiss case

3.) Speak with the attorney and who is then able to have the payments reduced to a more manageable amount of money with permission of Trustee after showing documentation to support the change in circumstances.

Are any of the statements I made incorrect? Am I missing any other options?

[justbroke]

1. ) Can the attorney try to convert back to Chapter 7 - or is this not allowed as the individual has recently filed a chapter 7 even though it converted to 13?

Yes you can, but the process is a little different. An unconverted Chapter 13 can be converted "by notice" where a Chapter 13 which was a prior Chapter 7 needs to be converted "by Motion". Where there is a notice, you just file the notice and voila, your case is instantly converted. Where you file by Motion, you usually need a hearing and the Trustee gets to object to conversion, as well as your creditors.

2.) Dismiss case

Possible, but this causes some procedural issues. If you have a pending Motion for Relief from Stay, the court may keep the case open for 180 days to allow the lender(s) to foreclose or repossess the property that was the subject of the RFS motion. Additionally, if you refiled, you would need to do the so-called first day motions to keep the stay in affect, otherwise it disappears after 30 days. This is to prevent serial filers from abusing the automatic stay. You would also need to pay the entire filing fee again for the Chapter 7, where if you converted from Chapter 7 to Chapter 13 to Chapter 7, there would be no additional fee (except attorney fees).

3.) Speak with the attorney and who is then able to have the payments reduced to a more manageable amount of money with permission of Trustee after showing documentation to support the change in circumstances.

If you have a change in financial status (or income) you should ALWAYS and IMMEDIATELY contact your Chapter 13 attorney in order to determine the next course of action. This could include a forbearance, a modification, a dismissal or even conversion.

[despritfreya]

In actuality you do not have the right to request dismissal of the 13 if you had converted from the 7 to the 13. 11 USC 1307(b) states “On request of the debtor at any time, if the case has not been converted under section 706. . . the court shall dismiss a case under this chapter.”

Now, if you convert back to the 7 and the reason you converted to the 13 in the first place was due to a “means testing/abuse” issue, I would imagine that the UST would move forward with a Motion to Dismiss under 707 - which, assuming you want “out”, you would not oppose.

Des.

[justbroke]

Ah yes Des. I suppose some people might try to convert to a Chapter 13 to avoid the UST, then try to convert back to the 7 as some sort of end-around.