Expert: Terry Leeders - 7/21/2007

Question
 My wife and I filed a chapter 13 about 4 months ago.  We have been marital problems for years and despite marriage counseling have decided a divorce is the best option for all involved parties, including my 5 yr old daughter, to avoid any more emotional damage by staying together in an unhappy home.  We were not eligible for Ch. 7 because of income, but now divorce will change this quite a bit.  We did file jointly on the Chapter 13.  What options do I have to still keep the house as my form of Child support and still have enough money to live on myself?  My Ch. 13 was a 100% repay plan.  Can I reduce the percentage amounts? Or can I convert to a 7 in order to discharge the debt so that paying my wife child support will be and option.  Currently I have a wage deduction weekly to pay the plan as it now stands.

Answer
You should speak to both your divorce attorney and bankruptcy lawyer.  It is possible to convert the case, or even to split the cases into 2 separate cases if one party wants to convert to chapter 7.  You would have to have enough combined monthly expenses to eat up the disposable income on a conversion.  There are other budget test and asset protection issues as well, so sit down with your lawyer to map out the best plan of attack.