Can I Convert my Chapter 13 Bankruptcy to a Chapter 7?

Answers from a Morris County Bankruptcy Lawyer

A Chapter 13 bankruptcy filing offers many advantages to individuals who are struggling under a massive debt load. Chapter 13 payment plans take three to five years to reach completion, and a person’s circumstances can drastically change in the years after filing for Morris County bankruptcy. If an individual finds that he or she can no longer afford the payments of the Chapter 13 plan, there may be an option of converting to a Chapter 7 bankruptcy.

Reasons for Conversion from Chapter 13 to Chapter 7

A Chapter 13 bankruptcy may no longer be manageable if a person experiences a change such as a job loss or reduced income, a significant medical event, a new child or the loss of a loved one. The plan is based on a person’s income and expenses at the time of filing; any kind of sudden loss of income or increase in expenses can disrupt the ability to fulfill the requirements of the plan.

Chapter 13 cases help debtors keep property like homes, vehicles, and other items that they cherish. However, debtors sometimes decide that they are no longer interested in keeping the properties and would like to be free of the obligation to pay for them.

The Chapter 13 to Chapter 7 Conversion Process

If you feel that you would benefit from converting to a Chapter 7, you should consult an experienced Morris County bankruptcy attorney.

The conversion process begins when you notify the court that you would like to convert your bankruptcy. After filing, the automatic stay is held in place, protecting your home and vehicle from seizure. You will attend a new meeting of your creditors, and the bankruptcy trustee in charge of your case will review your assets to see any assets are beyond allowable exemptions so that these excess assets can be used to pay off your creditors. Similar to Chapter 13, you may be able to protect some of your property through the bankruptcy exemptions.

A Chapter 7 case is sometimes preferable because you can complete it in about four months, versus the three to five years to complete a Chapter 13 bankruptcy. At the end of the Chapter 7 case, your debts are discharged, and you can begin your financial life anew and rebuild credit sooner.

Conversion to Chapter 7 offers a useful solution to certain debtors, but that does not make it right for everyone. Though it discharges many different kinds of debts, some obligations cannot be discharged through bankruptcy – mainly, some tax debts, family obligations and student loans. Additionally, a Chapter 7 case can stay on your credit report for up to ten years after you file, whereas a Chapter 13 can only remain on your report for seven years. Your Morris County bankruptcy attorney can help you decide if conversion is right for you.

Bankruptcy Representation Offered for Chapter 13 to Chapter 7 Conversion Cases

If you are considering converting your Chapter 13 case to a Chapter 7, help is available from a

Morris County bankruptcy attorney. If you have not yet filed for bankruptcy, our attorneys can review your options to help you decide the best alternative for your family to gain control of your future. Contact our office today for a free consultation of your financial situation.

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