help with ch13 to ch 7 questions

[dovette7]

We have been in CH 13 for 2 years, no late payments, etc. Husband is now unemployed as of last week and I work. We live in AR now but had filed in GA 2 years ago. My attorney told me that we should let our case get dismissed...wait out 6 months for our income to fall below median income and file CH 7. If Husband gets job then we may have to refile a CH 13 depending on income..... basically start all over. She told me that we DID NOT have to wait to refile 6 months after our case was dismissed though so if our income fell below before that (6 mo avg) we could file then.

I do not know if that is correct. In our CH 13, we surrendered our home and ALL secured stuff except 2 vehicles which are now paid off through the plan.

I called an AR office today and the lady I spoke with confused me more.

Do I have to wait 6 months from this dismissal or if wanting to file a CH 7, file when last 6 months is under median?

Should I have case dismissed or wait on trustee ( my GA attorney said let trustee do it so I will be protected longer from creditors)

On the Motion to lift Stay...since we gave all property back, does that affect me refiling in any way with unsecured creditors?

[Nicollette]

The 6 month thing, confuses me also. A friend of mine told me that if the Trustee dismisses a case, there is a 6 month waiting period, but if you voluntarily dismiss, you can turn around and refile. I'm not sure how true this is.

[justbroke]

Let's talk about the 6-month (180-day) filing prohibition first. This is controlled by the Bankruptcy Code and was part of the 2005 changes that Congress added (known as the BAPCPA of 2005). This change prevents a debtor from refiling if either they failed to meet an order of the court (including failure to appear) or if the debtor filed a voluntary dismissal and there was a motion for relief from stay pending.

This was to prevent debtors from abusing the system to avoid foreclosure, by leveraging the automatic stay and just keep dismissing the case... dragging out the foreclosure action of the creditor.

Other than that, there is no magic 6-month waiting period. Whether to let the Trustee dismiss the case or to voluntarily do this, all depends on the REASON and circumstances of dismissing! If the Trustee dismisses because you lost your job, they aren't going to ask for the dismissal with prejudice (meaning no filing within 180 days).

If the Trustee dismisses because you just don't want to pay your plan payments... then they'll seek the dismissal with prejudice. You can still refile and ask the court to consider special circumstances, but generally, you need to wait the 180 days.

I can't advise you on this, but if I were you, and the circumstances are purely related to loss of work... I might just let the Trustee do it.

[dovette7]

Thanks you for clarifying and that makes so much sense.

Here's something else....since husband is unemployed as of last week.... and we are in a CH 13... if we wanted to convert to CH 7, would they base that on the last 6 months of income or would they base it on currant income since he's lost his job?

[justbroke]

Thanks you for clarifying and that makes so much sense.

Here's something else....since husband is unemployed as of last week.... and we are in a CH 13... if we wanted to convert to CH 7, would they base that on the last 6 months of income or would they base it on currant income since he's lost his job?

This depends on what District you filed in. Some Districts interpret the Bankruptcy code to read that a Chapter 13 debtor may convert to a Chapter 7 at any time, and based on your current financial condition... not the dreaded lookback.

Other Districts believe you must re-qualify and basically re-take the means test as of the conversion.

Other Districts believe that you must have been qualified for a Chapter 7 at the time your Chapter 13 petition was filed.

So, the answer may not be what you like, but it depends. Your experienced BK lawyer will know what works in your District.