topic Chapter 13 to 7 conversion in Bankruptcy

Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 13:23:51 GMT

I filed chapter 13 about 13 months ago. At the time that's the only option my lawyers said I had. Seeing as how I didn't know anything about bankruptcies then, I said okay. But I was reading stuff about chapter 13 to 7 conversions and I came across a page about the means test. Apparently if you make below the median household income in your state or area, you automatically qualify for chapter 7 and do not have to take the means test. I looked over the pay stubs I sent the lawyers and added up those 6 months worth of pay and doubled it to get my pay for a year. I was 4 thousand dollars under. Shouldn't chapter 7 have been an option? Will I be able to convert using those 6 pay stubs I originally filed with?

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 03:34:45 GMT

Re: Chapter 13 to 7 conversion

despritfreya — Sat, 18 Mar 2017 14:32:10 GMT

@Anonymous wrote:
I filed chapter 13 about 13 months ago. At the time that's the only option my lawyers said I had. . . But I was reading stuff about chapter 13 to 7 conversions and I came across a page about the means test. Apparently if you make below the median household income. . . you automatically qualify for chapter 7. . . I looked over the pay stubs I sent the lawyers and added up those 6 months worth of pay and doubled it to get my pay for a year. I was 4 thousand dollars under. Shouldn't chapter 7 have been an option?

Did you add up your take home pay or your gross pay? You go by gross. Further, regardless of whether or not you were above or below median and/or whether or not you "qualified" based upon Form 122, what did your Schedule I and J show? Just because you "qualify" under the means test does not equate to an automatic Chapter 7 if your real time budget (I & J) clearly shows you have the ability to pay.

There are many considerations that go into filing a Chapter 13 and, without all of the details of your case, no one on this Forum can answer your question - "Shouldn't a chapter 7 have been an option".

Des.

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 16:04:29 GMT

I did gross pay. I have all the papers of when I filed and copies of expenses that were taken into consideration. After everything was said and done I had 100 dollars left over this time last year but was still told I had to file chapter 13

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 16:43:23 GMT

Is your plan a three or five year plan?

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 16:44:44 GMT

3 years

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 16:46:00 GMT

Even recalculated everything with current gross pay and all expenses not including unsecured debt and I'm negative $350 because my salary went down shortly after my plan confirmation

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 16:56:37 GMT

To me, it depends on what your objectives are. I'm 48 months into a 60 month plan. My payments weren't that big as I did not have much debt. At one point, I was considering converting. I was frustrated that chapter 7 let's you rebuild almost immediately while the 13 left me in credit purgatory for a while. I was two years in when I was thinking about this.

Ultimately, I decided to stick it out. I wanted to buy a house and was frustrated that I couldn't do anything to rebuild my credit. We'll, my attorney said I could get a couple of cards as long as the limits weren't past a certain amount. I got Open Sky and Fingerhut. Fast forward two years, and my scores are around 650... And my mid mortgage score is 643.we just received th trustee's approval to buy a home at 225k via FHA.

Every situation is different. I'm glad I stuck it out, as less than two years after discharge, it'll be off of my reports. 7's stay for ten years. You have to evaluate your reasoning? Is your reasoning that you simply can't live with the payments you're making monthly?

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 17:01:01 GMT

It is because of the payments. From my apartment complex raising my rent (I had a promotional rent of 900 on a 12 month lease, but has since went up to 1300) to losing about 300 a month, I cannot afford the payments. I have my phone, electricity, and cable on payment arrangements because I can't afford to pay it all at one time

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 17:08:35 GMT

Others opinions may differ from mine, but if you cannot survive with your current payments and can't get them modified, I'd seriously consider the conversion. It'll stay on your reports longer, but that's a secondary concern if you cannot make it financially with your current situation. You'll get to begin rebuilding sooner as well. Is your 13 plan paying your creditors in full?

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 17:10:32 GMT

No, only secured creditors who I kept i.e. My car and some furniture. All unsecured debt discharged. My plan really wouldn't be that bad if I didn't lose a bunch of money a month and if my rent stayed the same. Unfortunately that's life I guess

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 19:34:59 GMT

I don't know how conversion would help you if you are only paying for secured debt. Are you saying you want to give those things up?

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 19:39:10 GMT

Taking a look over my plan, I am paying a percentage towards unsecured. My mistake

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 19:39:28 GMT

And yes I am willing to give those things up and just convert to a 7

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 21:30:37 GMT

I want to convert because with my chapter 13 payments I am negative 475 a month and my payments are 550.

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 22:09:28 GMT

I remember you posting about wanting a secured Discover a few days ago. If you don't have enough money each month, how were you going to fund that? Also, I remember you getting credit from Penfed a couple of days ago. Why are you getting credit if you are in the negative. It sounds like you just want out of the 13.

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 22:16:56 GMT

I was inquiring about the Discover card being bankruptcy friendly. A bankruptcy lasts for 7-10 years as you know. I ask questions for future reference and was not looking to add discover any time soon but was inquiring for when I do with a bankruptcy on my report. And yes I have a CLOC with PenFed that will never be used because I will not be using that account. My money goes to USAA. I actually prefer a chapter 13 because it's gone in 7 years, but people's finances change and shouldn't be accused of just wanting out for no reason.

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 22:23:54 GMT

And if you read what I said before, my rent just went up after the promotional rent was over..... 2 whole days ago. I was fine before my rent went from 850 to 1367 every month. My trustee allows credit up to 5k... why would I want to get out of a 3 year plan that I'm already 13 months into with a trustee who is lax for no reason? But yeah you're right you know the situation. LOL

Re: Chapter 13 to 7 conversion

Anonymous — Sat, 18 Mar 2017 23:27:16 GMT

Actually you posted a screenshot about Discover secured while in a Chapter 13. I responded to it. All I know is what you post. Best of luck to you with whatever you do.

Re: Chapter 13 to 7 conversion

Anonymous — Sun, 19 Mar 2017 03:01:33 GMT

I don't think a thing is wrong with wanting to get out of a 13. The numbers don't lie: many do not successfully finish them. And for what, assuming you pass the means test? For a clean report a few years earlier? And you can't do much at all to rebuild your credit whereas I'd you filed a 7,yiu can be rebuilding in 2 months with tons of unsecured debt discharged.