Can I sell my car/lease a new one/then convert my 13 to a 7 ??

[SickofThis]

We are 36 months into a chapter 13. My husband just lost his job. We can't afford to keep making our trustee payments. My car is worth about 18,500. If we convert to a chapter 7 the trustee is going to take my car. So prior to converting to a 7- can I sell my car and use the proceeds to pay down a new leased car so I'll at least be able to get to work?

Thanks for your input.

[justbroke]

If you convert, the Trustee cannot take your car. Conversion is very special. Unless you did something that was in bad faith, all your property that you had in the Chapter 13 re-vested in you upon confirmation. That means, that the converted Chapter 7 is treated as if you filed the day you filed Chapter 13. Unless you had to pay some of the equity during the Chapter 13, the Trustee in the "converted" Chapter 7 is not entitled to the property. (I am assuming that you paid off the car during the Chapter 13.)

I would speak with my attorney about this for sure. There are some twists to this. If you were paying some of the equity in the Chapter 13 to the unsecured creditors, and they have not received all of that "value", then you may have a minor issue in the conversion. This is why it's best for your attorney to look at what your "Chapter 7 liquidation test" yielded in the Chapter 13. (This liquidation test yields an amount you would have paid to unsecured creditors if you had non-exempt property on the day you filed. IN a Chapter 13, they use that amount as the "minimum" to unsecured creditors even when you have no disposable monthly income (DMI). This is sometimes referred to as the "minimum" in a Chapter 13.)

You may be surprised after your attorney reviews this and tells you that the car is exempt!