It might actually be worse for him if he doesn't get converted to 13, though. In that case, he loses his house because he has more equity in it than the exemption.
It looks worse from his perspective, but I think its overall a better outcome. Yes he loses the house, and he'll whine, bitch, and throw a fit about it, but he gets $125,000 out of the sale. Plus all his other debts are wiped out, and he can play as much gacha as he wants once he qualifies for credit cards again, which is much sooner than with 13.
A Chapter 13 (or 11) plan has to be approved by the court, and the court will only do that if it's plausible. The burden of proof is on the debtor to establish that the plan is plausible and complies with the relevant requirements. Since Phil is too dumb to do this himself, he'll need to pay a lawyer more than nothing for that.
That's true. I'm not sure how this will play out. My money is on the outcome of the 341 meeting will be they ask Phil questions about his filing, "fix" all the errors, and quickly figure out he doesn't qualify for Chapter 7. The trustee will motion a judge to convert to Chapter 13. Phil may be given the option to back out at this point... It probably doesn't matter though because he won't do this. He loses the house if he doesn't get Chapter 13.
But here's the thing.
By fudging numbers and making his income appear so low, he kind of screwed himself out of Chapter 13. The whole point of Chapter 13 is to pay back some debt and avoid liquidation, and you can only do that if you have enough income to pay at least as much as the creditors would have received in liquidation.
If its determined that his income is higher than Chapter 7 allows, he'll need to prove his income is high enough to also qualify for Chapter 13. This would expose him as a liar. Everything he put on his initial filing is counter to him qualifying for Chapter 13. That's why he did it in the first place. This is why, I believe, very few Chapter 7's are converted to Chapter 13. The only time that ever happens is when you fuck up your filing.
I can't see a judge being too happy about someone trying to pull this off. He'd basically have to file for Chapter 13, and show he has a shit ton more income all of the sudden so he can afford a payment plan. This may be enough for a judge to believe it was done intentionally and that would be cause for dismissal.
The outcomes look like this:
- Phil gets Chapter 7 and loses the house because it exceeds the homestead exemption
- Phil doesn't get Chapter 7, and the case is dismissed due to abuse
- Phil doesn't get Chapter 7, and the filing is converted to a Chapter 13. It is later dismissed due to abuse or inability to provide a workable payment plan.
- Phil doesn't get Chapter 7 but somehow manages Chapter 13
Only in outcome #4 does Phil keep the house. If his case is dismissed, he'll be sued by his creditors and forced to sell eventually.
