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Deborah Alison Gates

Deborah Gates’s Answers

1 total

  • Conversion from chapter 13 to chapter 7 what happens to the $$$

    I am going to convert my chapter 13 bankruptcy to a chapter 7 because I cannot afford it. However, to date I have paid the chapter 13 trustee nearly $14,000. The case is not confirmed. What happens to the $14,000 when I convert? Does the tru...

    Deborah’s Answer

    Since your case has not been confirmed, creditors have received no distributions. The Trustee should be giving that money back to you, minus the Trustee's fees (10%). I would discuss your state's exemptions with your attorney, but in Idaho, the Trustee would go after that money if there were no applicable exemptions to protect it (ex. 75% of wages are exemptible, 25% are subject to turn over to the estate). You may be looking at a situation where you may have to spend some or all of those returned funds before you file your chapter 7 in order to keep the funds out of the reach of creditors; unless there is an exemption to protect the funds.

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