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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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My trustee emailed me this regarding my request for conversion

Resolved Question:

My trustee emailed me this regarding my request for conversion 7 to 13. “Under the Bankruptcy Laws, debtors may convert to another chapter within the Code as a matter of right. My permission is not required; however, no conversion is effective unless and until the court approves it.”
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

What is your Bankruptcy Law question, please? (What would you like to know?)

Customer: replied 5 years ago.
I need to formulate
Expert:  cfortunato replied 5 years ago.
Okay. Let me know when you finish formulating.
Customer: replied 5 years ago.
formula: Option 1 discharge chapter 7 (because spouse cannot join) then spouse would file chapter 13 striping the 2nd td and allowing time to settle debt with the first TD (short sale).

Option 2 dismiss chapter 7 specificing to the court that we want to file chapter 13 jointly.

I will need an attorney with either option. How do I locate an attorney with chapter 13 experience other then making random phone calls from google or yellow pages.
Expert:  cfortunato replied 5 years ago.
You should call the California Bar Association to ask for a recommendation for a Bankrutpcy attorney with Chapter 13 experience. The number is 415-538-2000.
Customer: replied 5 years ago.
I will. could you confirm my understanding of option 1 and 2. for its correctness and alert me to any issues. then this question will be closed out. thanks once again
Expert:  cfortunato replied 5 years ago.

If you do not want to keep the house, whether or not you want to short sell it, there would be no benefit to convert to a Chapter 13, as there would be no need to strip the mortgage.

It does not make sense to pay money to the Bankruptcy court for up to 5 years in order to strip a second mortgage if you do not want to keep the house.

 

Customer: replied 5 years ago.
formula: first mortgage is 137k ; second mortgage is 86k ; value of property is 72k.

plan: we would make the payments on the property 1st mortgage until short sale is complete .. estimated 6 months. if the 2nd is stripped Also the first will be more cooperative because they will not have to pay the 2nd to complete the short sale.

new situation spouse will be joining me in bankruptcy so i hope to dismiss chapter 7 and refile under 13.

I am a Realtor and work with clients buying homes after short sales foreclosures and bankruptcies. the most difficult credit issue is fore closure with minimum of 3 years before qualified to buy and bankruptcy and short sale 2 years to buy.

I do feel responsible in settling my debt rather then letting it go to foreclosure.



Customer: replied 5 years ago.
Question: is my understanding of the following correct?

1. we can make payments on the property 1st mortgage until short sale is complete .. estimated 6 months.

2. the second 2nd would be stripped given our limited income. the first will be more cooperative because they will not have to pay the 2nd to complete the short sale.

3. i will have settled my debt vs. the credit stigma of foreclosure.


Expert:  cfortunato replied 5 years ago.

Is this set of questions assuming you are going to file a Chapter 7 Bankruptcy?

 

Customer: replied 5 years ago.
i may dismiss chapter 7 and refile with wife as 13

or

discharge chapter 7 and refile as 13 with my spouse

either way their will be a 13 on this property.

hope that clarifies.



Expert:  cfortunato replied 5 years ago.
As I have already explained to you, there is no sense in converting to a Chapter 13 if you are going to short sell your house. Your liability for the mortgages can be discharged in your Chapter 7 no matter what happens to your house - whether it goes through foreclosure, or whether it is short sold.
Additionally, if you are not planning on keeping your house - whether a short sale or foreclosure, there is no reason to continue to pay the mortgage.
Customer: replied 5 years ago.
I absolutely want to short sell my home for reasons beyond the discharge of the debt. 13 will insure that I will have enough time for a short sale. I have not been making payments and trustee sale has been postponed.


question remains ... confirming my understanding of process. I appreciate your observations
Expert:  cfortunato replied 5 years ago.
Yes - your understanding of the process is correct.
cfortunato and 2 other Bankruptcy Law Specialists are ready to help you