Advice...Convert to Chapter 7


D

DIANA

We are planning on filing for bankruptcy. In our financial state now we would start off in Chapter 13. We know our finances are going to change in the future. We know that I am going to be quitting my job in the next 8-12 months for personal reasons and I'm not planning on going back anytime soon after. That would definitely throw us into Chapter 7 catagory with maybe $100 left after all expenses.

1. How hard is a transition to chapter 7 from 13 in California?
2. Should we retain a lawyer now?
We have a feeling that soon we will be garnished or levied through judgement.
3. If we have retained a lawyer can that be shown to a judge for proof that we intend to file BK? and then rush the filing soon after?

We are putting off Chap 13 for the time being because we have too much going on right now and so many things we need that we will never have a chance to get after filing chapt 13. Such as paying off 2 of our small credit cards, buying a washer and dryer (which is a necesity in my condition) and saving for the cost of filing BK. Also we will be moving in the next few months to a rental home which will be more expensive. We just don't feel we should file chapter 13 with all this stuff going on and have to re-design our payback plan over and over. We want to wait til its all done with.

In the meantime we could be sued, but we feel we should retain a lawyer soon just in case.
Is this a good idea?
4. How much does it cost to convert the case to chapter 7?
5. If our vehicles were in the plan would we lose them in the conversion?

6.How soon are the new BK laws going into effect?
As a household of 2, maybe children soon with a income of $52,000 net?
7.Will it prevent us from filing?

We have explored all the options for debt reduction plans and even started a bankruptcy file in June and trashed it when we thought our lawyer wasn't letting us include important expenses. Thats when we decided to hold off and get our stuff out of the way first.

Thanks for any info!

D
 
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B

Brett Weiss

1. How hard is a transition to chapter 7 from 13 in California?

Very simple; you just file a line and pay $15.
2. Should we retain a lawyer now?
Yes.

3. If we have retained a lawyer can that be shown to a judge
for proof that we intend to file BK? and then rush the filing
soon after?
It won't matter if you *intend* to file. It's only the filing
that will make any difference in the civil suit.
In the meantime we could be sued, but we feel we should retain
a lawyer soon just in case. Is this a good idea?
Retain the lawyer to do what?
4. How much does it cost to convert the case to chapter 7?
Depends. Most lawyers will charge one fee for the 13, and another
fee for the converted 7, since you pretty much have to start
things over.
5. If our vehicles were in the plan would we lose them in the
conversion?

Depends on the details of your case.
6.How soon are the new BK laws going into effect?
Currently, there are no new BR laws, since BARF hasn't been
passed yet.
As a household of 2, maybe children soon with a income of $52,000 net?
7.Will it prevent us from filing?
Not in and of itself.

--
Brett

*****************************************************************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* (e-mail address removed) *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
*****************************************************************

The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the facts
and the law applicable to your situation.
*****************************************************************


We are planning on filing for bankruptcy. In our financial state
now we would start off in Chapter 13. We know our finances are
going to change in the future. We know that I am going to be
quitting my job in the next 8-12 months for personal reasons and
I'm not planning on going back anytime soon after. That would
definitely throw us into Chapter 7 catagory with maybe $100 left
after all expenses.

1. How hard is a transition to chapter 7 from 13 in California?
2. Should we retain a lawyer now?
We have a feeling that soon we will be garnished or levied
through judgement.
3. If we have retained a lawyer can that be shown to a judge for
proof that we intend to file BK? and then rush the filing soon
after?

We are putting off Chap 13 for the time being because we have too
much going on right now and so many things we need that we will
never have a chance to get after filing chapt 13. Such as paying
off 2 of our small credit cards, buying a washer and dryer (which
is a necesity in my condition) and saving for the cost of filing
BK. Also we will be moving in the next few months to a rental
home which will be more expensive. We just don't feel we should
file chapter 13 with all this stuff going on and have to
re-design our payback plan over and over. We want to wait til
its all done with.

In the meantime we could be sued, but we feel we should retain a
lawyer soon just in case.
Is this a good idea?
4. How much does it cost to convert the case to chapter 7?
5. If our vehicles were in the plan would we lose them in the
conversion?

6.How soon are the new BK laws going into effect?
As a household of 2, maybe children soon with a income of $52,000
net?
7.Will it prevent us from filing?

We have explored all the options for debt reduction plans and
even started a bankruptcy file in June and trashed it when we
thought our lawyer wasn't letting us include important expenses.
Thats when we decided to hold off and get our stuff out of the
way first.

Thanks for any info!

D
 
G

GlenRow

Before you think that filing later on will be better, you might want to read
the article that Brett found and posted above under the subject heading
"What's Wrong With BARF (Bankruptcy Reform)" It sure looks like the
bankruptcy picture is going to get much worse fairly soon.

Some of what you wrote was hard to follow. But it sounds like you can't
afford to keep your debts current now on 2 incomes, but you will be moving
to a higher rent place and then quitting your job. In the meantime, you
want to be able to pay off some smaller credit cards, and you are wondering
if you will be able to stall the $23,000 potential lawsuit. All of this
might make some sense if the new bankruptcy law wasn't looming on the
horizon, but it is.

So, while this may sound strange to ask, what is the real incentive for you
to continue working for another 8 to 12 months and THEN quit your job? It
just seems that any money you earn in the next 8-12 months is going to go
toward paying dischargeable debts and generally treading water. You won't
be able to save money because any money you save will probably be taken by
the trustee when you file, right? If you expect to file anyway, wouldn't it
make sense to just leave your job sooner for personal reasons, let your
creditors go forward with any lawsuits they want to file, move into your new
place if that's your plan, and then file a Chapter 7 sometime soon before
the new law is passed or goes into effect?

I am not a lawyer so I don't know if what I am suggesting is correct or
conforms with present bankruptcy laws. I know you said you already talked
with one that you didn't particularly like, but maybe you can get another
opinion from another bankruptcy attorney in your area.



We are planning on filing for bankruptcy. In our financial state now we
would start off in Chapter 13. We know our finances are going to change in
the future. We know that I am going to be quitting my job in the next 8-12
months for personal reasons and I'm not planning on going back anytime soon
after. That would definitely throw us into Chapter 7 catagory with maybe
$100 left after all expenses.

1. How hard is a transition to chapter 7 from 13 in California?
2. Should we retain a lawyer now?
We have a feeling that soon we will be garnished or levied through
judgement.
3. If we have retained a lawyer can that be shown to a judge for proof that
we intend to file BK? and then rush the filing soon after?

We are putting off Chap 13 for the time being because we have too much going
on right now and so many things we need that we will never have a chance to
get after filing chapt 13. Such as paying off 2 of our small credit cards,
buying a washer and dryer (which is a necesity in my condition) and saving
for the cost of filing BK. Also we will be moving in the next few months to
a rental home which will be more expensive. We just don't feel we should
file chapter 13 with all this stuff going on and have to re-design our
payback plan over and over. We want to wait til its all done with.

In the meantime we could be sued, but we feel we should retain a lawyer soon
just in case.
Is this a good idea?
4. How much does it cost to convert the case to chapter 7?
5. If our vehicles were in the plan would we lose them in the conversion?

6.How soon are the new BK laws going into effect?
As a household of 2, maybe children soon with a income of $52,000 net?
7.Will it prevent us from filing?

We have explored all the options for debt reduction plans and even started a
bankruptcy file in June and trashed it when we thought our lawyer wasn't
letting us include important expenses. Thats when we decided to hold off
and get our stuff out of the way first.

Thanks for any info!

D
 
B

Brett Weiss

I believe that you would not be able to file for Chapter 7 under
the new law. As far as your not having "excess income," once you
re-run your budget with the (draconian) IRS expense allowance,
you are likely to have some...of course, you will probably have
to sell your home and cars and live in a cheap apartment, but you
would have "excess income."

--
Brett

*****************************************************************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* (e-mail address removed) *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
*****************************************************************

The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the facts
and the law applicable to your situation.
*****************************************************************
 
G

GlenRow

I am not a lawyer and I only understood about half of what the article said
about the new bankruptcy law. But, overall, it seems like the law will mean
that many more questions will be asked about your circumstances, more
stringent qualification rules will apply, your income will not be computed
as your actual income at the time of filing but rather as your average
income over the six months before filing, your higher rent place won't count
fully as a living expense because the allowable rent expense will be pre-set
under the new law, etc.
 
S

Sharon

Take my advice--do the Chapter 7 straight off, unless you absolutely
cannot. Not only will the new law make it impossible (at least in
your situation as you present it) but you are simply wasting precious
time. I know, we've been there.

If we filed Chpt. 7 in 11/01 instead of the Chpt. 13, it would be
almost two years and we would soon be qualifying for an FHA mortgage
as well as many other types of mortgages, have more money saved then
we do now (it is VERY hard to do anything under a Chpt. 13 because the
court basically supervises your life) and generally really feel a lot
less pressure. We wanted to try and pay something to our creditors
and also keep our house, but it was basically unworkable from the
start. The life events that followed in the last few months would
probably have forced us into a Chapter 7 anyway.

Just my advice, you have to decide for yourselves, but that is
basically what happened to us. Even when we were first considering
filing anything, some lawyers would ask "why in heavens name do you
want to file for a 13 when your mortgages are so high and you already
don't have much disposable income?"
Well, that's my 2 cents. Good luck whatever you decide.
 
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D

D Esposito

Well the problem lies in our income. We have about $1500 over expenses but
when the baby comes Next April 04 I will be quitting my job to stay home
with the baby. There goes about $1200 of the income. Plus the expenses of
the new child would hopefully put us in Ch 7 with maybe $100 left over or
maybe not.

Our fear is a judgment against us by a creditor in which my husbands wages
would be garnished. If it happened to me I would just quit my job early but
he can't. He's Union and the breadwinner. Another problem is he cannot
have more than 2 garnishments or he loses his job! So we may be forced into
a chapter13 before the 7. We would have to convert after the baby comes if
we want to have any money to live on.

D

--





Believe nothing because a wise man said it.
Believe nothing because it is generally held.
Believe nothing because it is written.
Believe nothing because it is said to be divine.
Believe nothing because someone else believes it.
But believe only what you yourself judge to be true.
-- Gautama Buddha
 
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G

GlenRow

.. . . .
Our fear is a judgment against us by a creditor in which my husbands wages
would be garnished. If it happened to me I would just quit my job early but
he can't. He's Union and the breadwinner. Another problem is he cannot
have more than 2 garnishments or he loses his job! . . . .
In some states, only one garnishment can be taken out at a time (the second
one can't commence until the first is paid off), there is a limit to the
percent of wages that can be taken each pay, and the employer cannot
retaliate against an employee for having a wage attachment. I don't know
the laws in your state.
 

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