Satisfying the conditions of Chapter 13 bankruptcy in Florida
On Feb. 5, a district court in Delaware found that it is not a debtor’s absolute right to convert a Chapter 7 bankruptcy to a Chapter 13 bankruptcy. In doing so, it upheld an earlier bankruptcy court decision denying a conversion motion brought by debtors who wouldn’t qualify as such under Chapter 13. In its ruling, the court cited the fact that the debtors had no regular income to consistently make payments under a Chapter 13 plan, a requirement that applies to consumers in Florida and aorund the country.
Furthermore, the ruling maintained that the debtors had not acted in good faith in seeking to convert the case from Chapter 7 to Chapter 13. According to the court, the debtors had made their request in an effort to stop a trustee from selling property to repay as much of their outstanding debt as possible. In a Chapter 7 bankruptcy, assets are liquidated while debtors are allowed to make payments and keep property under a Chapter 13 arrangement.
In this particular case, a couple was trying to prevent the sale by the trustee of a fire-damaged property for $143,423. Although settlement talks ensued, no settlement could be reached, and the court valued the property at $175,000. A company that had a mechanic’s lien on the home for $39,630 plus interest agreed to purchase the property as-is for $290,000.
Those who are seeking debt relief may wish to file for Chapter 13 bankruptcy, which provides for the repayment of obligations under a court-approved plan that lasts from three to five years. As this case noted, consumers must have a regular source of income to qualify, and there are other eligibility requirements that a lawyer can explain.