Should we convert 13 to 7?
I'm new here and have read through similar thread, but I don't see a situation quite the same as ours, and I'd appreciate some insight/advice.
We went into 13 on 9/18/11 for several reasons: no credit card debt, we rent, only one title loan on one car. My husband has been "paycheck" unemployed since 2008, but has had his own small business (seasonal yard work) since then. He had major surgery last year so was off from Oct. 2010-just now getting back to work, with no income at all, save about $1500 unemployment last fall til it ran out. I work at a very good professional job, and with tons of overtime last year (to compensate for him being off) we made too much for Ch. 7. The killers for us have been some bills I paid for personally for my mom's care (down to about $15,000 now, court judgment and garnishment), payday loans to try to keep afloat, and my college/grad school loans ($200 K/w interest).
I took a reassignment/promotion at work starting in Sept. last year, so my ungodly overtime went away (fine--I was working myself sick). I went from ~$9500/month to $7700/month for Sept-Dec., then dropped more OT so that Jan. forward is $5800/month. It looks to me like we should qualify for a Chapter 7 now (we're in IL, 4 in the home--me, spouse, one kid in college who's a 1040 dependent, and one kid who can't find a job age 23 and has nowhere else to go but back with us). I'm the only one working.
Here's what I'm wondering:
TO determine the means test, if I'd file April 30, my paychecks for the prior 6 months would be $38,100 ($15,400 Nov & Dec. + $23,200 Jan.-April, - $500 OT that I didn't get in Jan but have since Feb.), + maybe $1000 from my husband's unemployment, tops. The way I read it, this is how our income is figured, right--actual for the past 6 months, compared to the Federal median for our state for 6 months (in IL, $39,537)? So if this is right, it looks like we'd pass the means test and that's the end of that?
Can the Trustee protest a conversion to Ch 7 (assuming our income makes us eligible)? The guy we have is a real piece of work--out atty. told us at the outset he's one of the pickiest in this part of the country, oh, goody. He still hasn't approved our plan, and it's been 6+ months already. He seems incapable of/refusing to believe that my income has dropped so drastically--it has, as my check stubs and reports from my employer verify. I took the cut for career advancement and mental health reasons; I guess he thinks I need to keep working 80-hour weeks to satisfy him, but that's why we filed, so I could get some breathing space! Anyway, can he object/give us more crap if we're clearly eligible to convert?
What happens afterward? As I read it, I can add in bills that have accrued since the original 13 filing (and I'm behind on utilities and a few other small medical bills), so all those, as well as all the unsecured stuff from the 13 just go away, right? The title loan on the car should have been paid off already in the 13, as I read the reports from the trustee. I know my student loans will kick back in, but I hope to be able to negotiate rehabs with the collectors for them and then get into the 10-year and forgiven plan (I work at an eligible school). The lawsuit for my mom's bills should also go away, as will all the misc. payday loans and other junk (no credit card debt at all to begin with). So I'm thinking if I can go 13, I should come out just having to argue w/the student loan people, right? (No biggie there-I'll die long before those loans will, if I can't get the forgiveness; I'm resigned to always having them over my head.)
My thinking is, if We can convert to 7, I can then try to pick up more OT again, and my husband can get his business going again, and any extra nickel we make won't be going toward this 13. If we stay in 13, there's zero incentive to make any extra money. I don't mind about the hit to the credit report--ours is crap now, and we've been on a cash economy for several years. I'm used to living poor, but I'm sick of fighting this jerk trustee at every turn and still not be seeing any breathing room in the near future. As it is, most of our stuff (the vast majority of our bills are unsecured) is going to end up unpaid anyway, and those loans are going to kick in again some day anyway (whether when we get a Ch. 7 dismissal, or at the end of 5 years). I don't see the downside of going Ch. 7, IF we can do it.
What am I missing/misreading? I haven't called my lawyer yet, just because it takes forever to get an appt. with her. Mainly I want to check that I'm reading the calculation of the means test right, and that he can't just be a jerk and drag us out further if/when we file to convert (assuming we're eligible)--if I'm right and this is an option, I'll call and make sure we can get in to see her next week. (I can get "emergency" meetings fast, but I don't want to ask for one that's going to be a waste of her time.)
OK, sorry for all the boring detail and the lengthy post. MANY thanks for any advice, ideas, insights anyone here can offer.
We went into 13 on 9/18/11 for several reasons: no credit card debt, we rent, only one title loan on one car. My husband has been "paycheck" unemployed since 2008, but has had his own small business (seasonal yard work) since then. He had major surgery last year so was off from Oct. 2010-just now getting back to work, with no income at all, save about $1500 unemployment last fall til it ran out. I work at a very good professional job, and with tons of overtime last year (to compensate for him being off) we made too much for Ch. 7. The killers for us have been some bills I paid for personally for my mom's care (down to about $15,000 now, court judgment and garnishment), payday loans to try to keep afloat, and my college/grad school loans ($200 K/w interest).
I took a reassignment/promotion at work starting in Sept. last year, so my ungodly overtime went away (fine--I was working myself sick). I went from ~$9500/month to $7700/month for Sept-Dec., then dropped more OT so that Jan. forward is $5800/month. It looks to me like we should qualify for a Chapter 7 now (we're in IL, 4 in the home--me, spouse, one kid in college who's a 1040 dependent, and one kid who can't find a job age 23 and has nowhere else to go but back with us). I'm the only one working.
Here's what I'm wondering:
TO determine the means test, if I'd file April 30, my paychecks for the prior 6 months would be $38,100 ($15,400 Nov & Dec. + $23,200 Jan.-April, - $500 OT that I didn't get in Jan but have since Feb.), + maybe $1000 from my husband's unemployment, tops. The way I read it, this is how our income is figured, right--actual for the past 6 months, compared to the Federal median for our state for 6 months (in IL, $39,537)? So if this is right, it looks like we'd pass the means test and that's the end of that?
Can the Trustee protest a conversion to Ch 7 (assuming our income makes us eligible)? The guy we have is a real piece of work--out atty. told us at the outset he's one of the pickiest in this part of the country, oh, goody. He still hasn't approved our plan, and it's been 6+ months already. He seems incapable of/refusing to believe that my income has dropped so drastically--it has, as my check stubs and reports from my employer verify. I took the cut for career advancement and mental health reasons; I guess he thinks I need to keep working 80-hour weeks to satisfy him, but that's why we filed, so I could get some breathing space! Anyway, can he object/give us more crap if we're clearly eligible to convert?
What happens afterward? As I read it, I can add in bills that have accrued since the original 13 filing (and I'm behind on utilities and a few other small medical bills), so all those, as well as all the unsecured stuff from the 13 just go away, right? The title loan on the car should have been paid off already in the 13, as I read the reports from the trustee. I know my student loans will kick back in, but I hope to be able to negotiate rehabs with the collectors for them and then get into the 10-year and forgiven plan (I work at an eligible school). The lawsuit for my mom's bills should also go away, as will all the misc. payday loans and other junk (no credit card debt at all to begin with). So I'm thinking if I can go 13, I should come out just having to argue w/the student loan people, right? (No biggie there-I'll die long before those loans will, if I can't get the forgiveness; I'm resigned to always having them over my head.)
My thinking is, if We can convert to 7, I can then try to pick up more OT again, and my husband can get his business going again, and any extra nickel we make won't be going toward this 13. If we stay in 13, there's zero incentive to make any extra money. I don't mind about the hit to the credit report--ours is crap now, and we've been on a cash economy for several years. I'm used to living poor, but I'm sick of fighting this jerk trustee at every turn and still not be seeing any breathing room in the near future. As it is, most of our stuff (the vast majority of our bills are unsecured) is going to end up unpaid anyway, and those loans are going to kick in again some day anyway (whether when we get a Ch. 7 dismissal, or at the end of 5 years). I don't see the downside of going Ch. 7, IF we can do it.
What am I missing/misreading? I haven't called my lawyer yet, just because it takes forever to get an appt. with her. Mainly I want to check that I'm reading the calculation of the means test right, and that he can't just be a jerk and drag us out further if/when we file to convert (assuming we're eligible)--if I'm right and this is an option, I'll call and make sure we can get in to see her next week. (I can get "emergency" meetings fast, but I don't want to ask for one that's going to be a waste of her time.)
OK, sorry for all the boring detail and the lengthy post. MANY thanks for any advice, ideas, insights anyone here can offer.
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