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BK13 to 7 have questions?

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Regular Contributor

BK13 to 7 have questions?

Filed for BK13 in Dec 2015 for five year stint. Come to find out the trustee misfigured and they want $700 more a month for the next 14 months to make the case solvent which I can not afford. My attorney states since I am retired and on a fixed income now that I can convert my 13 to a 7. My questions are I know that the second mortgage I will now ha ve to pay going from a 13 to a 7 and since my 13 consisted of catching up back payments to my first mortgage will there be a way to work with them on that? Also on my credit report will it show another bk with a new date or will the 13 go to a 7 with same dates? I am almost 5 years with this on my report and thought if I could finish it would fall off after two more years but if I do this will I know be 10 more years wating?

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Message 1 of 8
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Valued Contributor

Re: BK13 to 7 have questions?

I don’t see how this is reasonable if your income has not gone up.

 

Everyone has a boss including trustees.

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Message 2 of 8
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Valued Contributor

Re: BK13 to 7 have questions?

How much were you paying?

 

How much originally owed on back payments?

 

Back payments should have been paid first as secured loan.

 

 

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $375k unsecured credit in 2020.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!

5% Rotating - Discover                         5%-20% - Amazon & Lowes                   3-6% Groceries - NFCU & Amex Preferred
3-5% Gas - NFCU & Ducks Unl            4% Dining & Entertain - Savor               3% Travel & Hotels - Flagship, Propel, & Uber
2% Everything Else - Flagship             1% Cancer Charity - Fifth Third             0% Finance Promos - PenFed & Capital One






Message 3 of 8
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Regular Contributor

Re: BK13 to 7 have questions?

Well when I filed I was working full time and within the past two months I retired from my job and my income has went down $30,000 a year. Now the fact that the trustee mis figured the amount I needed to pay at 2,180 till end of bk which was wrong and now they want 2,880 is not going to happen.

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Message 4 of 8
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Regular Contributor

Re: BK13 to 7 have questions?

Are you on a 100% payment plan?  I'm curious if you had your plan laid out under the assumption that your income would not drastically change over the 5-year period.  Typically, if you experience a change in income, your attorney and the trustee would be able to work with you to adjust your payments down to an amount that would allow you to maintain basic cost of living, which wouldn't necessarily be a 100% payment plan anymore... but with a 13, that's okay.  You just have to hit that 5-year mark of making agreed-upon payments and anything that remains will be discharged.  So if you haven't talked with your attorney about the need to adjust your payment plan based upon your change to a retirement status, that would be a good place to start.  It may be that converting to a 7 is the best decision, but on the other hand it might not... with only 14 months to go, I'd try to ride it out to the end with an adjusted payment plan rather than swap to a 7 that will live on your credit history for longer.  But that's just my opinion, it's best for you to explore all your options.  Good luck.

CH7 Filed Dec 31, 2018; DC Apr 9, 2019
FICO 8 at DC (Apr 15, 2019):
FICO 8 current (June 4, 2020):

Message 5 of 8
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Super Contributor

Re: BK13 to 7 have questions?

You can convert from Chapter 13 to Chatper 7, there are some technical requirements that you must meet. First, you will need to file a Notice of Conversion form with the bankruptcy court. Once filed, the conversion usually takes place in just a few days. When all goes smoothly, you won’t lose the protection of your automatic stay.

 

The one technicality that you may run into is the required means test that must be passed for the conversion to become final. You may have originally chosen Chapter 13 bankruptcy due to the fact that you made too much money to qualify for a Chapter 7. The means test was implemented as a way to make sure that debtors with enough disposable income ultimately paid some money back to their creditors. If you have experienced a job change or loss since filing for your Chapter 13 bankruptcy, you will likely be able to pass the means test.

 

Of course you'll have to talk to your lawyer for the best advice. Passing the means test now is the hurdle. If you filed a Chapter 13 bankruptcy because you could not qualify for a Chapter 7, check the rules in your jurisdiction and talk to your attorney before converting your case. Also, even if the means test isn't required, which some states dont require, you'll still have to explain why you can't afford your repayment plan.

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My posts are JMHO. My siggy is not to brag at all. Just sharing my experiences after learning here from rebuild to recovery after BK DC @ 540's. And to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 6 of 8
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Regular Contributor

Re: BK13 to 7 have questions?

Thanks for all the replys. Went chapter 13 originally to keep house and pay arrearages and strip second mortgage. I have made all payments since I first filed to what the trustee stated. I believe in the 42 months that I am possibly 2 payments in arrears. With the 18 pays left I will be short 9,000 to the first mortgage arrearage. Why the trustee did not pay more towards the first mortgage arrearage is beyond me. All I know is I paid what amounts I was told to pay.
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Message 7 of 8
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Regular Contributor

Re: BK13 to 7 have questions?

My first mortgage arrears was 28,354 and for the last 42 payment the trustee only paid on average 300 a month towards my first mortgage arrearage, payments to the attorney for a total of 2,0000, and the 10% conduit of 134 a month to trustee for them to cut a monthly house payment. So minus my conduit house payment the trustee had roughly 801.00 a month to pay towards the secured first mortgage arrearage and the 10 percent conduit if 134. So why was only 300 a month going towards the 28,000? I don't know.
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