Process - converting from a chapter 13 to a chapter 7

[Bkq]

Question: What is the process (length of time, etc.) for converting from a chapter 13?

Current status:
A) currently 16 months in on our chapter 13. (total plan was for 60 months)

b) wife is a teacher - and there is a good possibility that her contract will not be renewed in may 2012. This would cut our income by 50% - which - according to our attorney would make us eligible for chapter 7. We are not sure if she would be able to get another job - due to the current economy. I would handle everthing with our attorney - but i am trying to get a heads up now - as to what the process would be for filing for chapter 7 (i.e wait times, etc.).

Question:
** if we find out in may - that her contract will not be renewed - and it doesn't look like she will be able to find another job - i would contact our attorney to fill out the appropriate paper work. What are the steps invovled after it is filed with the court? (wait times, reviews etc.)??? Thx

[lrprn]

Question: What is the process (length of time, etc.) for converting from a chapter 13?

Once your recalculated Means Test shows less than about $160/month disposable income, you qualify to file Ch 7. Your lawyer should be able to estimate how long that may take if your wife's job does end and how long it will take him/her to file the signed Ch 7 forms. Once the court receives your Ch 7 forms, you have officially filed Ch 7.

Question: ** if we find out in may - that her contract will not be renewed - and it doesn't look like she will be able to find another job - i would contact our attorney to fill out the appropriate paper work. What are the steps invovled after it is filed with the court? (wait times, reviews etc.)??? Thx

Your times after filing Ch 7 will depend on your court's and your trustee's backlog of cases. Your lawyer is going to be the best resource to provide timelines and what to expect in your local court and with the Ch 7 trustees you may be assigned. Good luck!

[Bkq]

Thanks for the information. However, I still have a question. While all of this process is going on - with regard to Chapter 7 -- what happens regarding the payments that we have been making to the trustee - on our Chapter 13 plan? Obviously, we will not be able to make the $2,750 per month - which was determined at the time of the confirmation -- so what do we do? Do we pay whatever we can?? Also, I would assume that our attorney will file some type of paperwork with the Trustee/Court -- indicating that we may have to convert to a Chapter 7 status. Does the Court/Trustee put some type of "hold" on what we are currently paying? -- or -- do they say -- pay what you can? I am just trying to figure out what happens -- after they are notified. Thanks!!

[newbie2]

Thanks for the information. However, I still have a question. While all of this process is going on - with regard to Chapter 7 -- what happens regarding the payments that we have been making to the trustee - on our Chapter 13 plan? Obviously, we will not be able to make the $2,750 per month - which was determined at the time of the confirmation -- so what do we do? Do we pay whatever we can?? Also, I would assume that our attorney will file some type of paperwork with the Trustee/Court -- indicating that we may have to convert to a Chapter 7 status. Does the Court/Trustee put some type of "hold" on what we are currently paying? -- or -- do they say -- pay what you can? I am just trying to figure out what happens -- after they are notified. Thanks!!

The moment your wife receives notice that she won't have a job, pick up the phone and call your attorney. The Chapter 13 plan is never a "pay what you can" plan. You are responsible for making the full payment on time, no matter what happens. That is why it is so important for you to let your attorney know the minute there is a change in your income that will make it impossible for you to make timely. in-full plan payments. If you will be converting to a Chapter 7, then your attorney will file the necessary paperwork for you, hopefully in a quick manner. If you can't make full plan payments until it is filed then your attorney will advise you on what should be done. Your situation is not unusual, and your attorney will certainly know how to handle it quickly and how to advise you. Good luck to you and your family.

[AngelinaCat]

Locate and read Justbroke's blog. He converted from a Ch13 to a Ch7. And he did all of this pro se. I don't know the particulars involved, but I am sure he will be coming on later in the day.

Keep in mind that your wife, with her teaching credentials, may be able to get 'Substitute Teacher' status, if he contract is not renewed. That won't be reliable for a Ch13 Plan probably, but will still help.

Good luck to you both!

[justbroke]

A conversion is procedurally tough. I may want to use an attorney to convert if you were represented in the Chapter 13! For example, most pro se debtors mistakenly file a Motion to Convert Chapter7 Case to Chapter 13 Case where they clearly should have used a Notice of Conversion to Chapter 7 (under 11 USC 1307(a))! It makes a big difference! In the former, you have to wait for a hearing on the motion and there could be objections. In the latter, the case is immediately converted upon the notice reaching the Clerk's office! (Of course there are rules too...)

When converting from a Chapter 13, you almost need to do the same things as shutting down a Chapter 13 case that is being discharged! You have to vacate orders for wage deduction, and you may even need to file a motion to compel turnover against the Trustee (to get any money they are holding).

So many things.

lrprn has provided good information about what you should do and when you should do it. As for timeline, the case is immediately converted on "notice" of the Chapter 7 (Notice of Conversion). A new 341 Meeting is scheduled, and the schedule is normal for a Chapter 7.

The nice thing with a conversion (to Chapter 7) is this! You get to include ANY NEW DEBT from the time that you filed the Chapter 13 and the time that your Chapter 7 is converted! Even more fun, is the fact that your Chapter 7 filing date is technically your Chapter 13 filing date! So, instead of the Chapter 7 being on your report for 10 years, it will be 10 year less the time you were in the Chapter 13! (I filed in 2008 and converted in 2010. My Chapter 7 falls off in 2018, not 2010!!!)

[coronaglen]

@justbroke, did you own a home when you converted? I may have to move back east and my wife will lose her work. So our income will drop a lot. I have to qualify a new means test correct?i am in southern california.

and if you did own your house, and you are willing to give it up, how quickly does one have to leave it?

thanks

[justbroke]

@justbroke, did you own a home when you converted? I may have to move back east and my wife will lose her work. So our income will drop a lot. I have to qualify a new means test correct?i am in southern california.

and if you did own your house, and you are willing to give it up, how quickly does one have to leave it?

Yes, it was an investment home. I actually had 2 investment homes when I first filed (my Chapter 13). I surrendered one. I was willing to give up the home, but I was able to get a modification on one of them and kept that one.

[debtinohio]

I'd start my own thread, but this one is so close to my situation with the exception of 1 last ? I had:

Upon converting, what if you had 2 cars paid off in your CH13 plan that are worth about $15K each, do you need to find a way to exempt these vehicles now even though they were negative equity when you started the CH13?

[justbroke]

You would not need to exempt them if you convert! They are not property of the Estate (if your Chapter 13 plan either explicitly, or did not mention, that all property of the debt revests in the debtor upon confirmation). Of course, if the "liquidation test" for your Chapter 13 yielded some "minimum" amount you must pay unsercured creditors during the Chapter 13, you may need to make sure that happened or you could be an asset case. This is a very specific area and a good (conversion) attorney will know exactly what to do and expect.

So, baring that you had any special minimum you had to pay in the Chapter 13 (not from DMI but because you kept non-exempt property), the Chapter 7 would be a no asset case.

[debtinohio]

Thanks JustBroke - at this point the only thing being paid is unsecureds and we had no assets on the CH13 file date. Now if I could get my attorney to actually call me back...