Husband laid off today. Can we convert from 13 to 7?

[dlinid]

I will try to keep this a short post. We are at 26 mos of 100% payback. We made good money and put a lot away in ira's and 401k. Also helped college age kids with tuiton and loans, ect. Our house and student loans are paid outside. Now my husband is fired. Can we go from a 13 to a 7?
1)Will the trustee want all the money we have been able save in our retirement accounts?
2) How about the tens of thousands we gave the college age kids for school?

We still have around $75,000 outstanding according to datacenter13

also 3 cars, one still being paid off. The two paid off cars are worth $2000 and $4500. The one still paying on is worth about $10,000 and we owe $4000 on it, paying in the plan.

This is a mess, we were humming along really, really well. There is no chance for another job like this, my husband is older and wants to just plain retire now.
I know that calling my lawyer is the first thing to do, but I want to be prepared for what they have to say. Why does firing always happen on a Friday????

Thanks in advance for any relpies.

[Pandora]

So sorry to hear of your hubby's job loss; been there done that (hugs)

I guess before you try to convert, the question is can you amend your plan at all? 100% pay back - how much of that is to secured?

Make sure your hubby applies for Unemployment, he may have to fight for it through proceedings, but its worth it as most times a denial is overturned depending on the circumstances for the firing.

[HHM]

That sucks.

As for conversion, it depends on local practice, but in general, you will first request a 3 month forbearance in your chapter 13 plan payment while your husband looks for another job. If no employment by then, then the court would most likely approve a conversion.

Get back in touch with your attorney, they can advise you as to the specifics.

[dlinid]

He cant get unemployment because of a military pension. We tried it prior when he was laid off about ten years ago. So we cant go that route. I am much more concerned about the money we spent assisting our children. I dont want them being sued because we were in a 100% payback and had extra money and helped them. That is my biggest fear.

[HHM]

I am not saying get unemployment, the trustee and court will want to see a good faith effort to get another job before they will grant a conversion to chapter 7. Of course, conversion assumes that you now qualify for chapter 7.

As for the help to kids and whatnot, I wouldn't worry about it.

[kornellred]

Can't get unemployment because of a military pension? Huh? Every employee pays state unemployment insurance - it is an involuntary deduction from your paycheck. Unemployment benefits are paid from an insurance policy.

[BrokeinMD]

Sorry to hear of your husband's layoff, OP. Please keep us posted.

[momofthree]

Every employee pays state unemployment insurance - it is an involuntary deduction from your paycheck.

This doesn't apply to a military pension, but the above quote is inaccurate. I work for a non-profit organization that doesn't deduct any unemployment or disability insurance premiums from my paycheck. They are exempt from that withholding. Sucks for me if I get laid off, but it is what it is...

[addisonsmom]

My husband just got notice that there will be layoffs soon. We are only 7 months in our CH 13. Looks like he will be okay with the first round of layoffs in May, but he will likely get laid off in September. I am not working, unable to find anything. I am sure we will likely convert to a CH 7. We've already spoken to our attorney about all of it. Things are not looking good in this area and I shutter to think about moving.

[woeisme]

have you already paid enough into your CH 13 to cover any assets you would have had to give up in a CH 7? Without his income are you below median? If so, and if this is a permanent situation (HMM is right, the court will want to wait and make sure he isn't ready to get a new job the day after they convert!) then yes should be possible to do CH 7. You were in CH 13 making 100% payback, they can't fault you for using what was left of your income any way you chose (tuition) since they allowed you to have that $ instead of making the plan shorter duration at higher monthly payments. When my husband went on disability they made us wait to be sure it was permanent, but deferred payments in the meantime, although after his disability pay kicked in we were still in 13, just at lower payback. Ironically, we are right on the borderline with median income but because we didn't pre-plan to make our expenses as high as possible prior to filing, still have $400 DMI, if we dismissed we could probably file a CH 7 after getting a car loan... but don't want to take the risk with less than 2 years left on plan!