If a bankruptcy started as a Chapter 13, but the person can no longer follow the plan, can the bankruptcy be converted to a Chapter7?
Yes, the bankruptcy can be converted from a Chapter 13 to 7. Some people are unable to continue making the payments as outlined in their plan or wanted to keep property that they no longer desire to retain. There are also circumstances where the court may force someone to convert their Chapter 13 to a 7. I would advise speaking to the attorney that handled the original bankruptcy filing.
In many cases, yes. Whether you can or should depends on details we do not have, including information on your debts and assets and what has changed since you filed. The attorney who filed your 13 is the one who can answer that, and you should retain him or new counsel for any possible conversion.
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Conversion from chapter 13 to 7 is a relatively easy process. However, a detailed examination of your assets, income, and eligibility should be done to make sure that conversion is best. For example, you may be paying a dividend to unsecured creditors in your chapter 13 because you had equity in property. Conversion in such a case could result in the property being liquidated by a chapter 7 trustee and lost to you. Higher than median income, or prior chapter 7 filings could also make you ineligible for a chapter 7. And, if you are paying secured creditors in your chapter 13 case, they may not be getting paid what they would have gotten paid had you never filed. Converting to chapter 7 will result in the secured debt reverting back to pre-bankruptcy terms, and a loss of the collateral. Therefore, make sure you get some advice before you do anything.
The above information is general in nature. In order to obtain more specific legal advice upon which to base your important decisions, you should consult with an attorney in person and retain one of your choosing. Robert M. Gardner, Jr. Hicks, Massey & Gardner, LLP
Over the years I converted many clients from Chapter 13 to Chapter 7. The bigger question is whether is this the right decision for you. It depends on many factors, to very important ones are the amount of equity you have in your real or personal property, is over the exemption? And also what the amount of the unsecured debt you would be discharging. If the amount of debt is less than 15,000.00 it usually not worth using a chapter 7 since you can only file once 8 years , but every case is different. You need to discuss with your an experienced attorney.
Whether it CAN be converted, or whether is SHOULD be converted, are two separate questions and require many more facts. Speak with your lawyer.
Any case can be converted if the judge signs the order! But should you? The other answers explain some of that. But in addition to them, I add that any or most debts incurred AFTER filing your ch 13 case are dischargeable up to the date of the conversion which is an advantage of converting too. Other assets obtained post filing may also be a reason to convert. But only your attorney will know all those facts to then advise you. The new rules require compliance with certain schedules also and the new means test forms if converted . Good luck. You have only 2 real goals : to keep all your equity and to discharge all your debts..but facts can affect our advise to you!
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