Question on our latest situation

[Kingxray]

As some of you know we were filing C7, not for CC but because of a lawsuit filed by my father where he tried to garnish hubby's wages. My father's lawyer showed up at 341 and caused a stir with UST. We were surrendering our first home that would not sell and has equity in it but it also has a lien from my father. We quickly became a presumption of abuse case and many of our expenses were disallowed on our B22. Soon after that the UST filed a motion to dismiss. UST told our lawyer to rework the numbers. We are attempting to do that but probably won't pass the means test because of the UST is not allowing some of the expenses. Lawyer says we can fight or go C13.

I guess we will probably convert (hubby wants to fight) but I have some questions regarding coverting.

In C7 the UST will not take the home we are surrendering (with equity in it to pay creditors) nor strip the lien. Does this change in C13? Is the lien stripped and counted as an asset that we are surrendering?

Post filing date hubby got a bonus and we got a tax refund (which our lawyer told us to file and we could keep). I have been buying things for the house, area rugs, curtains, faucets, etc. We also got quotes for a walkway and yard and are saving money for that in the spring (house is new construction). Hubby also needs major dental surgery. I would also like to give some money to my kids who are living on their own but struggling like most young adults. Is it okay that I am spending this money? No payment plan has been set up with UST. We haven't even made our decision or had our hearing yet.

As asked on another thread, in a conversion is there another 341, resubmitting of documents, bank statements etc., new filing date?

Finally, in your opinion, would you fight, convert, or let it dismiss and refile?

I know I have asked some of this stuff before but am looking for some fresh thoughts. Sorry for the book. Thank you all for being so helpful.

[dingdong]

My cousin filed Ch13, due to a business failure. She had massive IRS issues to the tune of 150,000.00 plus tons of other biz debt. The plan was challenged by the IRS and I think ( not sure) that she couldn't make the payment and then converted a few months later to a Ch 7. I looked at her petition in PACER and she had a second ( actually third, she missed the frst ch 7 341) 341 when the case was converted to a 7. She has now been ruled a no asset case in the Ch 7.

I don't know if that helps you or not, but she did have another 341 after the conversion.

I don't know much about ch 13, but thought that might answer your question about the 341?

Good luck, sorry you are having to go through this.

[fltoo]

Not going into detail, but do you mind me asking generally, what kind of expenses they would not allow?

Just asking for someone contemplating a 13 due to being over the income for a 7 in NJ.

[Kingxray]

In our C7 they did not allow 401K loan payroll deduction, 2nd car (which we have to buy this summer), hubby has company car now, and expenses for our other home that we are surrendering.

[fltoo]

tks