Convert Chap 13 to Chap 7

[calligirl]

What is the name of your state? WA

I want to file Chap 7, I have a chap 13 right now. The lawyer I used said that I would lose my house and car if I went to Chap 7. With my 1st and 2nd mortgages I have only a few thousand dollars in equity on my house. As long as I continue to pay the mortgage can't I use my exemptions to keep my house and my car? (which is also worth only a few thousand dollars) Thanks

 

[Ladynred]

It would certainly depend on HOW MUCH equity you have in the house and the car.

If its less than the exemptions, then you are looking at little to no risk for either.

Exemption for a homestead is 30K - pretty generous.

Exemption for vehicles is for 2 cars, $2500 total.

There is also a wild card of $1000 to use on any personal property.

Is the car financed ???

 

[rke55]

Why would the attorney say that you'd lose your home?

 

[Ladynred]

If she has a lot of equity in her home it IS possible a Trustee could grab for it. If she has little equity, then I have a feeling that this is one of those cases where the lawyer was looking out for his OWN wallet - and pushed a CH 13 instead of a 7 to benefit from the larger fee !

 

[rke55]

Ladynred - I filed a 7 Oct. 29th with my 341 in Dec. I have no equity (no assets) in my home (Ohio) but my monthly payment is big ($3K). I'm concerned that the trustee will give me flack about the monthly house payment. What are your thoughts?

Thanks.

 

[Ladynred]

Wow.. what a house payment !

The point is not what your house payment is.. its what you've got left after paying for all your normal expenses.. and that includes house payments and car payments, which are secured debts. If you want to keep your home and have less equity than the exemption, then you keep paying and keep the house. I doubt the amount of your payment will be questioned - its what you've got LEFT OVER that matters in a Ch 7.

 

[HomeGuru]

Ladynred - I filed a 7 Oct. 29th with my 341 in Dec. I have no equity (no assets) in my home (Ohio) but my monthly payment is big ($3K). I'm concerned that the trustee will give me flack about the monthly house payment. What are your thoughts?

Thanks.

**A: another hijacked thread.