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Chapter 13 Conversion to Chapter 7

Case Conclusion Date: 11.10.2011

Practice Area: Chapter 13 bankruptcy

Outcome: Client is sad to lose her house but happy that she does not have any debt.

Description: Client went through 5 modification petitions. Bank modified once and then pulled back the modification from under client. Client wanted to keep house. Client filed for Chapter 13 to stop the impending foreclosure. When client submitted Chapter 13 Plan, bank did not accept the plan and trustee moved for dismissal of case. Attorney immediately converted case to Chapter 13 and lien stripped the second loan and wrote off second loan of approximately $79,000. Additionally, client was able to discharge an additional $120,000 of unsecured debt. Bank filed a motion to lift the stay of bankruptcy. Attorney let it go unopposed. Bank took back a house worth $350,000. The first loan was approximately $523,000. Client saved close to $173,000.00 of future first mortgage payments. After discharge and upon final order of the Court granting the lift of the stay. Bank contacted attorney about allowing my client to modify house. Client does not owe any money to the bank for the first or second mortgage. Client does not owe any credit card company any money. Client is free and clear of any debt. I advised client to not modify unless bank is willing to bring the house value to the Fair Market Value of the property. Outcome is yet to be determined. Client can go and rent a house or an apartment for half of what she was paying to the bank. Meanwhile, client is still negotiating with the bank

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