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My small business went under and I filed a personal Chapter 13 in June 2010. In August 2010 I retired from the military.

Gloucester, VA |

I was making $85K on active duty but now have a new job making $25K less a year. It's been difficult meeting our original plan when we filed because of the decrease in income.

I'm now taking a new job in May 2011 making around $170K a year. Should I convert my Chapter 13 to a 7 instead of making a huge plan payment? Can I change to a Ch 7? When should I file? Right now or once the income from my new job starts coming in? Will a Trustee even approve a Ch 7 for my case? Will I still have protection from the creditors in my original Ch 13?

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Attorney answers 4


You should talk to your attorney but it may be too late to convert to chapter 7 and you may have to pay off much more of your debt then you proposed in your original plan. Speak with your attorney today.

Good Luck!

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Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only and the fact that he has worked as an Assistant District Attorney; State Supreme Court Clerk; Special Assistant United States Attorney (Hawaii); Assistant Cornell University Counsel or Judge Advocate, United States Marine Corps should not be relied upon to assume that these statements reflect the policy of these organizations.


I'm afraid your statement does not indicate circumstances where conversion to a Chapter 7 would be appropriate.

[In accordance with the community guidelines of Avvo, this is not "legal advice", nor does it form an attorney-client relationship.]


I would rate your chances of converting your case to Chapter 7 as slim to none. Though your current income, depending on the number of dependents and deductions, may pass muster under the means test, a conversion normally requires filing an amended Schedule I. Since that Schedule requires a showing not only of your current income but anticipated changes in the coming year, I think it's pretty safe to say that the US Trustee would send one of its attorneys to attend your hearing to ask about your new job.


There's a loophole to the income requirement for filing Chapter 7. If you are 40% disabled veteran and most of the debts were incurred when you were on active duty. Otherwise, I don't see that you have any chance.