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Converting your Chapter 13 PLAN to a Chapter 7 after the Bankruptcy Abuse Protection Consumer ActWritten by: Ruben Ernesto Vasquez Reputation Level 8
Posted over 3 years ago. 7 helpful votes, 0 comments
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No Court Order is RequiredConversion right is not subject to any limitations, there is no reason for notice and a hearing prior to conversion to a Chapter 7. Therefore, Federal Rule of Bankruptcy Procedure 1017(f)(3) provides that no court order is required, and the debtor may simply file a notice of conversion in order to convert the case from chapter 13 to a chapter 7. 2
Keep in Mind the Date of ConversionFederal Rule of Bankruptcy Procedure 1017(f)(3) states that the date of filing of a notice of conversion in a case under chapter 13 of the Bankruptcy Code is treated as the date of the entry of the order of conversion for the purpose of applying Rule 1019. (i.e time periods) Federal Rule of Bankruptcy Procedure 1019 controls the conversion of a chapter 13 case to a chapter 7 case. 3
Keep Time Periods in MindA new time period for filing claims, a complaint objecting to discharge, or a complaint to determine dischargeability of any debt(s) shall commence pursuant to Fed. R. Bankr. P. 3002, 4004, or 4007, provided that a new time period shall not commence if a chapter 7 case had been converted to a chapter 13 case and thereafter reconverted to a chapter 7 case and the time for filing claims, a complaint objecting to discharge, or a complaint to determine dischargeability of any debt(s), or any extension thereof, expired in the original chapter 7 case. See Federal Rule of Bankruptcy Procedure 1019(2). 4
Is Converting a Chapter 13 to a Chapter 7 Absolute?Section 1307(a) of the Bk Code permits conversion of a C13-PLAN case to a chapter 7 PLAN at any time as a matter of right, with no prerequisites and provides that “any waiver of the right to convert under this subsection is unenforceable. 11 U.S.C. § 1307(a). The only exception is where the debtor is plainly ineligible for relief under that chapter. See 11 U.S.C. §§ 706(d), 1112(f), 1208(e), 1307(g). 5
Is Converting a Chapter 13 to a Chapter 7 Absolute?Section 1307(c) allows a case to be converted to chapter 7 by the court “for cause.” That term has been interpreted to include bad faith. See In re Lilley, 91 F.3d 491 (3d Cir. 1999)(“for cause” under section 1307(c) includes bad-faith filings). The 5th Circuit has ruled that debtors have a one-time absolute right to convert a chapter 7 to a chapter 13. In re Martin, 880 F. 2d 857 (5th Cir. 1989) and In re Neely, 334 B.R. 863 (5th Cir. 2005). Pursuant to In re Martin, other courts have held that, therefore, debtors have a one-time right to convert from a chapter 13 to a chapter 7 absent exceptional circumstances. See In re Copper, 426 F.3d 810, 814 (6th Cir. 2005), and In re Porras, 188 B.R. 375, 377-78 (Bankr. W. D. Tex 1995) (both citing Martin for the proposition that the debtor has an absolute right to convert from Chapter 13 to chapter 7). 6
Procedure (I.e. Process)File your notice of conversion. File your means test, check your jurisdiction to see if it is required. amend your schedules with any changes notify creditors Good luck. Additional ResourcesBankruptcy Code, Colliers on Bankruptcy and Bankruptcy case law Related Questions2 Attorney answers: 
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