I have a chapter 13 bankruptcy that I have been paying for a little over 3 years. I still owe $25,000. My biggest debt is my car loan. I wanted to either convert it to a chapter 7 or just drop my bankruptcy plan and pay off my car loan myself by refinancing or reaffirm. Is this possible without losing my car?
You pose 2 questions.
Can you convert your case to Chapter 7?
You still have timing; did you file Chapter 7 within 8 years of filing Chapter 13?
Did you and can you know pass the Means Test?
Do you have assets in excess of allowed Illinois exemptions?
The second question is: Can I pay off my car note if I drop or convert to Chapter 7?
The answer is "Yes." But, how much will you owe? While there is an amount to be paid in Chapter 13 and where you would get the title upon discharge outside of Chapter 13 the amount due is based on the contract interest. You may well owe more outside of Chapter 13 that you owe within Chapter 13.
It is in your best interest to discuss options with your lawyer; or, explore your options with another law firm.
Call your attorney to discuss this asap! If you don't have an attorney you need to get one before you convert to a Chapter 7! There are too many variables to give you an answer online!
Any advice given is general in nature and cannot be relied upon until the client retains the attorney after a full interview and review of the facts of the situation. No attorney-client relationship exists until a retainer agreement is signed and fees are paid.
As Mr. Winter stated, contact your attorney, or get one, before you convert, as it isn't as simple as just making a motion to covert.
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