In a bankruptcy setting, some cases may be converted from a Chapter 13 status filing to Chapter 7. Under Chapter 13, the debtor must pay back some or most of their debt under a 3-5 year restructured payment plan. Under Chapter 7, the debtor’s assets are liquidated, and some of the debts discharged, providing the person with a “clean slate” (though their credit will be affected).
Thus, switching from Chapter 13 to Chapter 7 may be necessary if:
Converting Chapter 13 to Chapter 7 can generally be requested at any time after the original Chapter 13 claim was filed. The process is basically the same as filing a fresh Chapter 7 claim. Thus, all the usual restrictions apply when making the conversion (such as being required to wait at least 8 years from the previous Chapter 7 bankruptcy filing).
In some cases, a bankruptcy court may actually require a debtor to convert a Chapter 13 claim to a Chapter 7 claim. This is known as “forced conversion”, meaning that it is backed by a court order to do so. Failure to make the conversion may result in legal penalties for the debtor.
Forced conversion can only be ordered when the court has good cause to do so, such as:
Converting Chapter 13 to Chapter 7 can generally be requested at any time after the original Chapter 13 claim was filed. The process is basically the same as filing a fresh Chapter 7 claim. Thus, all the usual restrictions apply when making the conversion (such as being required to wait at least 8 years from the previous Chapter 7 bankruptcy filing, and fulfilling the means test if required).
In general, the following need to be addressed when converting from Chapter 13 to Chapter 7:
Thus, many of the requirements for Chapter 7 will automatically be fulfilled when the claim is converted from the Chapter 13 filing. However, you may need to contact a lawyer for assistance with the other requirements. For example, some of the paperwork that will be carried over might still need to be amended for adjustments to Chapter 7.
In a bankruptcy claim, converting from Chapter 13 to Chapter 7 can involve many complicated steps. It is to your advantage to hire a bankruptcy lawyer when making such a conversion. A qualified attorney in your area can help explain your filing options to you, and can assist with all the required forms and documents. Also, your lawyer can be on hand to represent you during formal court hearing.
Last Modified: 03-20-2014 04:52 PM PDTLaw Library Disclaimer
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