Converting a Chapter 13 to a Chapter 7

[Waltermelon]

We declared chapter 13 in late 2007. Our debt, other than 2 cars is unsecured. We lost the house prior to filing chapter 13. We were not allowed to go with chapter 7 due to income.

I moved from Detroit, MI to NW Chicago 10/2008 to take a better paying job. As it turned out the new company forced me to take a 20% cut in pay or take a layoff about 3 months after starting the job. Also, my wife found out she is unable to work due to health issues. She did not make a significant amount of money anyway.

The bottom line is that I fall just below the median income for Illinois now. We would like to give up the only secured items, the 2 cars, and convert to a 7.

We believe it is a fairly simple process of simply:
1. Sending a motion to convert from a 13 to a 7,
2. Sending in forms I and J to verify expenses and income.
3. Sending in copies of check stubs for 6 months.

Is there any other advice that someone can give to help us do this ourselves as well as any specific advice on filing the motion in Michigan? Do we send the motion to the trustee only or do we send it to creditors too? Is there specific wording that needs to go on the motion.

Are we missing anything on this?

[justbroke]

The bottom line is that I fall just below the median income for Illinois now. We would like to give up the only secured items, the 2 cars, and convert to a 7.

Chapter 7 does not require you to be under the median income in order to receive a discharge. Being able to receive a discharge in a Chapter 7 just means that you don't have the "means" to fund a Chapter 13.

1. Sending a motion to convert from a 13 to a 7,

Conversion from Chapter 13 to Chapter 7 is by Notice not by Motion. Check your local rules on the process.

2. Sending in forms I and J to verify expenses and income.

Check your local rules on the process. Some Districts "require" that you file a new Means Test (Form B22A) when converting form a Chapter 13 to a Chapter 7. In any case, you may want to submit a new means test anyway (on Form B22A) since your numbers have changed. You would also update Forms I and J. The other nice thing... you can add any new creditors since you filed your Chapter 13, that you want to discharge in your Chapter 7.

3. Sending in copies of check stubs for 6 months.

You should check your local Trustee's rules and needs. The Trustee usually has a website and a package which indicates which documents they need upon filing.

Is there any other advice that someone can give to help us do this ourselves as well as any specific advice on filing the motion in Michigan?

Did you originally file with an Attorney? If so, you may need to Motion to Proceed In Forma Pauperis if you can't afford a lawyer. You may also want to check out any free (pro bono) or Legal Aid services available to you.

Do we send the motion to the trustee only or do we send it to creditors too? Is there specific wording that needs to go on the motion.

You need to follow the local rules for your District. They will be very specific. Whenever you file a Notice of Conversion, it generally needs to be served upon all creditors including the Trustee... and filed with the Court. Your case number will stay the same. You'll get a new 341 Meeting date. As a matter of fact, some Districts have "fill in" PDF forms for "routine" Motions and Notices. That's why I suggest you either check the District's website for local forms, or you contact your Case Manager to ask a "procedural" question about "if" they have such a form, and "where" to get it. never ask how to fill it out... as that's a legal question.

Are we missing anything on this?

If you're planning to do this yourself... probably alot. You need to get familiar with the local rules on this.

Basically, you'll be filing a Notice of Conversion under 11 USC 1307. Get familiar with 11 USC 1307. Get familiar with Local Rules. The Federal Rules of Bankruptcy Procedure (Fed. R. Bankr. P) which covers this is 1017. There may be a local rule as well for 1017. Specifically 1017(f) covers conversions. You would be doing so under 1017(f)(3) since it only requires a notice of conversion. (Please note that some Districts don't use the new "numbering" system, so may call Rule 1017 something else, but the rule covers Conversions and Dismissals.)

[gunner01]

converting from chapter 13 to 7

Chapter 7 does not require you to be under the median income in order to receive a discharge. Being able to receive a discharge in a Chapter 7 just means that you don't have the "means" to fund a Chapter 13.

Conversion from Chapter 13 to Chapter 7 is by Notice not by Motion. Check your local rules on the process.

Check your local rules on the process. Some Districts "require" that you file a new Means Test (Form B22A) when converting form a Chapter 13 to a Chapter 7. In any case, you may want to submit a new means test anyway (on Form B22A) since your numbers have changed. You would also update Forms I and J. The other nice thing... you can add any new creditors since you filed your Chapter 13, that you want to discharge in your Chapter 7.

You should check your local Trustee's rules and needs. The Trustee usually has a website and a package which indicates which documents they need upon filing.

Did you originally file with an Attorney? If so, you may need to Motion to Proceed In Forma Pauperis if you can't afford a lawyer. You may also want to check out any free (pro bono) or Legal Aid services available to you.

You need to follow the local rules for your District. They will be very specific. Whenever you file a Notice of Conversion, it generally needs to be served upon all creditors including the Trustee... and filed with the Court. Your case number will stay the same. You'll get a new 341 Meeting date. As a matter of fact, some Districts have "fill in" PDF forms for "routine" Motions and Notices. That's why I suggest you either check the District's website for local forms, or you contact your Case Manager to ask a "procedural" question about "if" they have such a form, and "where" to get it. never ask how to fill it out... as that's a legal question.

If you're planning to do this yourself... probably alot. You need to get familiar with the local rules on this.

Basically, you'll be filing a Notice of Conversion under 11 USC 1307. Get familiar with 11 USC 1307. Get familiar with Local Rules. The Federal Rules of Bankruptcy Procedure (Fed. R. Bankr. P) which covers this is 1017. There may be a local rule as well for 1017. Specifically 1017(f) covers conversions. You would be doing so under 1017(f)(3) since it only requires a notice of conversion. (Please note that some Districts don't use the new "numbering" system, so may call Rule 1017 something else, but the rule covers Conversions and Dismissals.)

Hello Justbroke,

I was hoping you could provide me with some direction. We have recently converted from a chpt 13 to a 7 due to change an income. Our attorney proformed a new MEANS test prior to us filing to see if we could convert but, has not given us any additional information as to what to expect.

Can you giving me any insight as to what else to expect? What kind of documentation may be requested? Would this documentation be requested before my chapter 7 341 meeting? Sorry for all the questions but, I am seeking as much info as possible.

gunner01

[justbroke]

Can you giving me any insight as to what else to expect? What kind of documentation may be requested? Would this documentation be requested before my chapter 7 341 meeting? Sorry for all the questions but, I am seeking as much info as possible.

It really goes just like your Chapter 13 went. You'll have a 341 Meeting and they'll ask for similar documentation. Generally it's not too different in the amount of information required to submit to the Trustee! The questions at a 341 Meeting are the same as well. There may be additional probing into some areas, but if you've been to one 341 Meeting... you've been to one 341 Meeting.