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Chapter 13 converstion to Chapter 7

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I have a few questions regarding converting my Chapter 13 to Chapter 7, and also Attorney's fees as reported in the National Data Center.

  1. How long does a conversion take once initiated?
  2. When do Chapter 13 payments stop?  Once a conversion is filed, or completed?
  3. What will happen with my car (do they come and get it?), and approximately how long do I have to find a replacement vehicle?

Regarding attorney fees:

  1. Some of my attorney fees are included in the Chapter 13 plan.  What happens to them if / when I convert?
  2. When I look at my information on the NDC (National Data Center) website, I noticed that there is zero payment recorded for "Attorney payments made outside the plan".  I did pay my attorney $1500.00 outside the plan.  Should this concern me?  Should this have been reported to the Bankruptcy Judge and be recorded in NDC?

I know this a lot, and appreciate any and all help! 

Thank you!!

Donna

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I have not practiced in your circuit, so the rules and practices could be different than my experience.

 

1.  A conversion, once filed, takes a few weeks, mostly to set up the hearing, some districts require an in person hearing others do not. Your attorney would know.

2.  They should stop once the conversion order is entered, but may take another pay period.

3.  The car creditor will have to wait until the chapter 7 is discharged unless you voluntarily turn the car over to them.

1.  The unpaid attorney's fees will become an unsecured, priority debt in the chapter 7.

2.  Your attorney should have reported the fees in the initial filing on the form describing attorney fees.  If not, it is not your problem, but between your attorney and the US Trustee.

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Thank you very much.

If the same attorney is filing the conversion, will he / she then be able to collect the unpaid fees?

Again, I appreciate your help.  I just want to be clear on what to expect, to make the best decision.  As a nurse, this is like alien-speak to me.

Donna

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If there are assets to be administered by the chapter 7 trustee, may be able to collect the fees.   In some districts and if it is included in the fee agreement, he can collect a fee for the conversion motion and hearing (if necessary).  He would also have to get court approval for any additional fees.

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In response to your questions:

 

Quote

1. How long does a conversion take once initiated?

 

Your case is converted the moment your attorney electronically files a Notice of Conversion.

 

If you decide to file the Notice of Conversion on your own, it is converted the moment the Clerk enters the Notice on the Docket.

 

There is a $15.00 court fee to convert a 13 to a 7 and it is due at the time the Notice of Conversion is filed.
 

Quote

 

2. When do Chapter 13 payments stop?

 

 

 

 

Whenever you stop sending them.  If you continue to send payments after the Notice of Conversion is filed those funds will eventually be returned to you.

 

Quote

3. What will happen with my car (do they come and get it?), and approximately how long do I have to find a replacement vehicle?

 

When you convert your case you are required to file a Statement of Intention.  If you fail to timely file the Statement the protection of the automatic stay will end and the lender can repo.  Assuming you do file your Statement, you have 30 days from the Chapter 7 341 meeting to act on your intention.  If you do not, the stay is lifted and the lender can repo.  Assuming the stay is lifted due to your failure to timely act, it is quite possible that the lender will not repo the vehicle until your discharge is entered - but such is up to the lender.  Alternatively, if you wish to keep the vehicle, contact the lender to see if you can get back in its "good graces".

 

Quote

4. Regarding attorney fees: Some of my attorney fees are included in the Chapter 13 plan.  What happens to them if / when I convert?

 

Attorneys fees owed pre conversion (for the 13 in your question) are no different from any other post petition/pre conversion standard type debt. They will be subject to the discharge.

 

Edt to clarify. . . If there is a court order approving payment of attny fees and the Chapter 13 Trustee is holding funds there is a possibility that the Chapter 13 Trustee will honor the court order upon conversion.  HOWEVER, the recent USSC decision of Harris v. Viegelahn seriously compromises this possibility.

 

Quote

5. When I look at my information on the NDC I noticed that there is zero payment recorded for "Attorney payments made outside the plan".  I did pay my attorney $1500.00 outside the plan.  Should this concern me? 

 

No.  You paid a retainer to the attny.  Your retainer has nothing to do with NDC. 

 

Des.

Edited by Despritfreya
clarification

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