what do you need to change from chaper13 to chaper7

If you convert your case you can include the house and let it go.

LEGAL DISCLAIMER
Mr. Larkin is licensed to practice law in CA and is located in San Diego. His response here does not constitute legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Larkin strongly advises the questioner to confer with an attorney in their own state to acquire more information about the specifics of their case.

Your question raises two separate issues: Can you convert from chapter 13 to chapter 7; and Can you discharge your mortgage loan debt in the converted case.

You can convert under Section 706 of the Bankruptcy Code to chapter 7 if you qualify as a debtor under that chapter of the bankruptcy code, per the United States Supreme Court decision, In re Marrama. The conversion process begins by filing a notice of conversion with the Bankruptcy Court Clerk and paying the appropriate court filing fee. If you do not qualify as a debtor under chapter 7, your attempted conversion could be denied.

As to whether you can surrender the house without having to pay the remaining loan balance, that question turns on two issues. First, are you eligible for a chapter 7 discharge? And second, if the lender takes the house back, will there be a deficiency balance left on the loan after the house is sold?

These are questions a qualified bankruptcy attorney should look at based upon your circumstances and prior bankruptcy history before you decide to convert your case.