Chapter 13 & now possible job layoff

[TheBrokeCouple]

Hello,

I am asking this question for my sister, who is currently in a chapter 13. They had to file chapter 7 in 2001 & were discharged in 2002 ( I know, they have had their issues...whatever). Anyway, my brother in law is worried he could lose his job.

They are also interested in getting out from under their money pit of a house. IF they are able to convert their 13 to a 7 they could do this....their BK attorney told them that they are past the "time limit" or something to that effect to convert to a 7. She did not really understand what they were saying.

Essentially they were told they would be re-evaluated to see if they could afford the new budgeted payments, if his income goes away..if they could not, and they were not CH7 eligible they would then be removed from chapter 13 relief and have to repay all of their debt on their own without the help of the BK court.

They would be eligible to convert to a 7 again, right? Assuming it's been the 7 years since their last discharge date?

Does any of this sound correct? We live in Indiana.

Thanks so much you guys!

** We did CH7 and I know NOTHING about a CH13 process or their rules.

The Broke Couple

[lrprn]

....their BK attorney told them that they are past the "time limit" or something to that effect to convert to a 7. She did not really understand what they were saying.

What their lawyer is saying is that since they filed in 2001, they are allowed to convert their current Ch 13 to Ch 7 as long as it's been eight years since they filed their first Ch 7 case and they now qualify for Ch 7 (the rules have changed quite a bit since 2001).

They would be eligible to convert to a 7 again, right? Assuming it's been the 7 years since their last discharge date?

Actually, eight years have to pass since they filed their last Ch 7 case before they can convert from Ch 13 to Ch 7 and still be discharged. They also must qualify for Ch 7 under the new bankruptcy law that went into effect in October 2005. Since their lawyer said they did qualify, that's a good sign that they can.

Let's hope this time they've really learned to live within what they make and never get financially overextended so badly again.