Convert from 13 to 7

[Jovigirl22]

Has anyone here converted froma chapter 13 to a 7? As of last week, I quit paying CC's, the phone calls have begun! We wont qualify for a 7 until Nov 1, if no OT comes my husbands way in the next 15 weeks. My atty recommends we file a 13, then convert to a 7. The atty fees are paid for as a union benefit of my husbands, so not worried about that, HOWEVER, we are worried about the house/cars. We are current on house and car payments, and planned to file a 7, then reaffirm. If we file a 13, they then get small payments, or are crammed down. Then, a few or several months later, when we file a 7, we are in arrears, right? You cant file a 7 if you are in arrears, so how does this work? My atty swears that we wont be in arrears, but another atty said we would be. What to do?

[newbie2]

Has anyone here converted froma chapter 13 to a 7? As of last week, I quit paying CC's, the phone calls have begun! We wont qualify for a 7 until Nov 1, if no OT comes my husbands way in the next 15 weeks. My atty recommends we file a 13, then convert to a 7. The atty fees are paid for as a union benefit of my husbands, so not worried about that, HOWEVER, we are worried about the house/cars. We are current on house and car payments, and planned to file a 7, then reaffirm. If we file a 13, they then get small payments, or are crammed down. Then, a few or several months later, when we file a 7, we are in arrears, right? You cant file a 7 if you are in arrears, so how does this work? My atty swears that we wont be in arrears, but another atty said we would be. What to do?

First, the arrears question: If you are current when you enter a chapter 13 plan and you don't make your secured payments within the plan (you paying trustee, trustee making payments) then you should be fine. The other attorney may be referring to the fact that when the trustee makes the payments on your behalf they are usually behind. (Ours is one month + behind all the time.)

As far as timing your filing, if you can at all hold off until November I would do so. Yes, the calls are annoying. If you can ignore them or find a way to thwart them (cell phone with new number just for the creditors, Google voice, etc) then that would be best. To start a Chapter 13 plan and then convert to a 7 isn't easy, and it is also more expensive. There is also no guarantee that your trustee wouldn't find some disposable income somewhere to keep you in that 13 plan.

[Jovigirl22]

First, the arrears question: If you are current when you enter a chapter 13 plan and you don't make your secured payments within the plan (you paying trustee, trustee making payments) then you should be fine. The other attorney may be referring to the fact that when the trustee makes the payments on your behalf they are usually behind. (Ours is one month + behind all the time.)

As far as timing your filing, if you can at all hold off until November I would do so. Yes, the calls are annoying. If you can ignore them or find a way to thwart them (cell phone with new number just for the creditors, Google voice, etc) then that would be best. To start a Chapter 13 plan and then convert to a 7 isn't easy, and it is also more expensive. There is also no guarantee that your trustee wouldn't find some disposable income somewhere to keep you in that 13 plan.

Newbie, thanks again for your reply. We are current on our house/cars, as a matter of fact the cars are weekly payroll deductions. The cost of converting is a non issue for us, as my husbands union benefits include all atty and filing fees. I wasnt worried about the phone so much (annoying, yes, but obviously not a big deal), however, my atty's legal secretary said they will call her the first month asking for a case number, and when they dont get that they will start the lawsuits.

What determines if the trustee gets to make the payments, or me? I would imagine the trustee would want to make them, as they get 10%, but it appears to be a choice.

Also, I am waiting until Nov 1 to file a 7 because we are over the means (70,621 for our state, we are 71,436 when looking at May-oct, but Jan, Feb, March, April all had rare overtime for my husband..........we went 3 years with no OT, and beginning of this year he worked an extra 10 hours per week! We wont be under the means, but pretty close to it if we wait. Now, if OT gets thrown our way in the next three months, Nov 1 one is a big NO for chapt 7, would have to consider a 13 until we can drop close to the means again.