My question involves bankruptcy in the state of: Florida
I filed for Chapter 13 protection 3 years ago but it took close to 1 year to get all the paperwork through the courts and get it approved. So I have been making payments for 2 years now. I had 1 asset I was trying to protect and that was roughly $50,000 in my savings account. Outside of that, 1 vehicle worth maybe $8,000 (now $4,000), no home or other major assets. I owed the IRS just over $21,000. My hope was that I would get back to work and be able to use my income to pay off the debt.
At the time, I was not aware how any of this worked and trusted my attorney to get me through this with as little pain as possible, especially financial pain. I knew I would have to repay the taxes but it took my attorney 1 year to tell me that I would also have to fork over the taxes plus an amount equal to the $50,000 I was trying to save ($20 some thousand to the Trustee and close to $30,000 for ???) And because it took 1 year to tell me that, my savings account was actually down to roughly $40,000 at that time. He told me this 1 day before he went into court to have the entire package approved and essentially asked me ďwhat do you want me to do?". I was actually floored by this but after waiting 1 year and having less than 24 hours to decide, I told him I had no choice but to accept it. I was just hoping I could make it work somehow.
I could write a book on why, but I have not worked in 4 years. Short story, my previous jobs required a security clearance so the bankruptcy ended that. I also had a large gap in my resume, my age, and probably a few other things working against me. Iíve looked outside my field but suspect I am viewed as over-qualified and likely to leave? Regardless of the reason, itís been 4 years since my last paycheck. My savings is below $10,000 now and I know that will run out in about 4 more months.
So now I am considering changing the 13 over to 7. Thereís not much left in my savings and Iím probably going to use part of that as a cushion against being totally homeless when the **** hits the fan.
Iíve been digging around in this site and some other venues, but I canít find how any of this would play out going from a 13 to a 7 with federal taxes only, and limited assets. Iím still a few months off from this happening but Iím trying to see if I can get some advice on the best way to handle this. When this all started 3 years ago, I knew I owed the IRS roughly $6,000 and had no problem with that. But during the Chapter 13 proceedings it ballooned to $20 some thousand and a balloon payment that would bring all my payments to the court to equal the $50,000 I had in my savings account. Had I known then what I know now, I would have taken a different approach, but it is what it is.
Anyway, In a few months I will be broke (or close to it) with no job and very little hope. Hopefully someone can tell me how changing over to a chapter 7 will affect my monthly payments and total that I owe. The plan I am on now just is not going to work. Thanks!!
BTW, I obviously have an attorney, but I do not entirely trust them and wanted to ask here first before I approach them about changing this. I feel like they just railroaded me into whatever was convenient for them before, not what would work in my best interests.