Due To A Divorce My Primary Residence Has Changed. How Will This Effect Me If I Decide To Convert A Chapter 13 To A 7?

[Garrard]

My circumstances have changed since I went under a Chapter 13 plan. My wife filed for divorce and now I am living in one of my multifamilies. This is now my primary residence. I've consistently made payments to the trustee and my mortgages; but with the divorce it is quickly becoming evident that I will not be able to continue paying. Now I have child support and upkeep of a new household. I currently have two multifamilies. The first one is now losing money and I want to proceed with a short sale with the trustee's permission. That leaves the other multifamily which is now my primary residence. If I convert from a Chapter 13 to a Chapter 7? How will this effect my new primary residence?

[Dantrell]

Due to a divorce my primary residence has changed. How will this effect me if I decide to convert a We are now a few years removed from the 2005 bankruptcy law change. For the past couple of years, bankruptcy practitioners were unclear as to an individual's right to convert a case from Chapter 13 to Chapter 7.Chapter 13 is known as reorganization bankruptcy, in which you make monthly payments for a three- to five-year period. Chapter 7 bankruptcy means all or most of your debts are eliminated without having to pay anything back.The general understanding was that at the time you wanted to convert from Chapter 13 to Chapter 7, you based the analysis on your income and expenses at the time of your original Chapter 13 filing. Meaning, you could not take into account your change in circumstances to re-evaluate your current monthly income versus expenses.At least in Southern California, this appears to have changed. Now, the trustees are looking at your current financial picture. The trustee is the person assigned to your individual case who determines whether you qualify for the bankruptcy. I cannot speak for the entire country, but California trustees have adopted this new, appropriate approach of assessing whether you qualify for Chapter 7 bankruptcy protection based on your current income and expenses.Typically, people file Chapter 13 for two main reasons, although other reasons exist. One is that the filer wants to save a valuable asset, like a home. He or she is delinquent on the mortgage payments and needs to "reorganize" in order to catch up on those delinquent payments.The second reason is that the filer has too much income leftover after necessary and reasonable expenses. This additional income prohibits the person from qualifying for Chapter 7 bankruptcy. Depending on his or her income, the Chapter 13 plan period will be from three to five years.Unless you are leaving your current job to care for your aunt, you probably will have too much income to qualify for Chapter 7. You said she is offering room and board; therefore, you will not have these expenses to include in your updated list of necessary household expenses.If you have decided to leave your current job, then you might easily qualify for Chapter 7. You will need to file a motion to convert your case from Chapter 13 to Chapter 7, along with updated schedules regarding your income versus expenses. These are Schedules I and J in the bankruptcy petition. Provide your most recent tax returns and, in the case you have left your job, proof that you are no longer employed.If you qualify for Chapter 7 now, then you can have your case converted and eliminate most or all of the debt listed in your Chapter 13 bankruptcy petition. Sources: http://www.bankrate.com/brm/news/bankruptcy/20080506-bankruptcy-conversion-a1.asp newuser62116592 48 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[suttecliff87]

Divorce After Chapter 13 BankruptcyOften, divorce precedes bankruptcy, and is, in fact the ?last straw? that pushes an individual into bankruptcy. While in many cases the financial hardships caused by divorce are legitimate, prior to the Bankruptcy Abuse Prevention and Consumer Protection Act(BAPCPA) of 2005 bankruptcy was often used as a way to completely sever ties with an ex-spouse and avoid financial obligations.Couples contemplating both bankruptcy and divorce should probably complete the divorce prior to the bankruptcy rather than wait until later. They will not be allowed to proceed with both at the same time.One reason why couples should divorce first and file second is that their financial status will be clear from the outset. They may be allowed to file Chapter 7 rather than Chapter 13.Chapter 13 is a bankruptcy that includes a repayment plan of some or all of a person?s debt over a three to five year period. It is generally chosen in order to save a valuable asset ? such as the family home. In some cases it is the only option available because a couple?s income is too high to qualify for Chapter 7.If you have already filed Chapter 13, your divorce could permit you to alter the terms of your bankruptcy and allow you a lower payment or even a grace period with no payments while you work things out. It could also qualify you to convert to Chapter 7 ? in which all debt is wiped out.Any change in financial circumstances can grant you this leeway. Other instances could be loss of employment or illness.The important thing to remember is to notify your trustee immediately ? especially if the pending divorce means you don?t have the money to make the scheduled Chapter 13 payment. Whatever you do, don?t just ignore the payment without first notifying the trustee of the reason.In order to have your case reviewed and possibly alter the terms of your bankruptcy you will have to file appropriate documents, which include proof that one party has moved out and is paying rent and/or utility bills at another location. So it is important to determine that the divorce really will take place and you really will be maintaining separate households.The increased household expense would be the determining factor in deciding whether the bankruptcy terms can be altered.money, chapter 13 primary residence, business

[Adalbert]

We are now a few years removed from the 2005 bankruptcy law change. For the past couple of years, bankruptcy practitioners were unclear as to an individual's right to convert a case from Chapter 13 to Chapter 7.Chapter 13 is known as reorganization bankruptcy, in which you make monthly payments for a three- to five-year period. Chapter 7 bankruptcy means all or most of your debts are eliminated without having to pay anything back.The general understanding was that at the time you wanted to convert from Chapter 13 to Chapter 7, you based the analysis on your income and expenses at the time of your original Chapter 13 filing. Meaning, you could not take into account your change in circumstances to re-evaluate your current monthly income versus expenses.At least in Southern California, this appears to have changed. Now, the trustees are looking at your current financial picture. The trustee is the person assigned to your individual case who determines whether you qualify for the bankruptcy. I cannot speak for the entire country, but California trustees have adopted this new, appropriate approach of assessing whether you qualify for Chapter 7 bankruptcy protection based on your current income and expenses.Typically, people file Chapter 13 for two main reasons, although other reasons exist. One is that the filer wants to save a valuable asset, like a home. He or she is delinquent on the mortgage payments and needs to "reorganize" in order to catch up on those delinquent payments.The second reason is that the filer has too much income leftover after necessary and reasonable expenses. This additional income prohibits the person from qualifying for Chapter 7 bankruptcy. Depending on his or her income, the Chapter 13 plan period will be from three to five years.Unless you are leaving your current job to care for your aunt, you probably will have too much income to qualify for Chapter 7. You said she is offering room and board; therefore, you will not have these expenses to include in your updated list of necessary household expenses.If you have decided to leave your current job, then you might easily qualify for Chapter 7. You will need to file a motion to convert your case from Chapter 13 to Chapter 7, along with updated schedules regarding your income versus expenses. These are Schedules I and J in the bankruptcy petition. Provide your most recent tax returns and, in the case you have left your job, proof that you are no longer employed.If you qualify for Chapter 7 now, then you can have your case converted and eliminate most or all of the debt listed in your Chapter 13 bankruptcy petition.

[dennie18]

Thank you for your response on my problem. You have given me valuable information to chew on. My only concern now is what happens to my "new" primary residence if I convert to a chapter 7. This property did have arrearages when I filed for Chapter 13. My lawyer did a cram down procedure. If I convert to a chapter 7 what happens to the arrearages on my primary residence?

[Monty]

Divorce After Chapter 13 Bankruptcy Divorce After Chapter 13 BankruptcyOften, divorce precedes bankruptcy, and is, in fact the ?last straw? that pushes an individual into bankruptcy. While in many cases the financial hardships caused by divorce are legitimate, prior to the Bankruptcy Abuse Prevention and Consumer Protection Act(BAPCPA) of 2005 bankruptcy was often used as a way to completely sever ties with an ex-spouse and avoid financial obligations.Couples contemplating both bankruptcy and divorce should probably complete the divorce prior to the bankruptcy rather than wait until later. They will not be allowed to proceed with both at the same time.One reason why couples should divorce first and file second is that their financial status will be clear from the outset. They may be allowed to file Chapter 7 rather than Chapter 13.Chapter 13 is a bankruptcy that includes a repayment plan of some or all of a person?s debt over a three to five year period. It is generally chosen in order to save a valuable asset ? such as the family home. In some cases it is the only option available because a couple?s income is too high to qualify for Chapter 7.If you have already filed Chapter 13, your divorce could permit you to alter the terms of your bankruptcy and allow you a lower payment or even a grace period with no payments while you work things out. It could also qualify you to convert to Chapter 7 ? in which all debt is wiped out.Any change in financial circumstances can grant you this leeway. Other instances could be loss of employment or illness.The important thing to remember is to notify your trustee immediately ? especially if the pending divorce means you don?t have the money to make the scheduled Chapter 13 payment. Whatever you do, don?t just ignore the payment without first notifying the trustee of the reason.In order to have your case reviewed and possibly alter the terms of your bankruptcy you will have to file appropriate documents, which include proof that one party has moved out and is paying rent and/or utility bills at another location. So it is important to determine that the divorce really will take place and you really will be maintaining separate households.The increased household expense would be the determining factor in deciding whether the bankruptcy terms can be altered.money, chapter 13 primary residence, business Sources: http://www.creditscorequick.com/blog/?p=434 madhi19 48 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Ellwood]

Petelandlord said: 1 Thank you for your response on my problem. You have given me valuable information to chew on. My only concern now is what happens to my "new" primary residence if I convert to a chapter 7. This property did have arrearages when I filed for Chapter 13. My lawyer did a cram down procedure. If I convert to a chapter 7 what happens to the arrearages on my primary residence? 48 months ago