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Converting from Chapter 13 to Chapter 7 Bankruptcy

7/7/2014

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Bankruptcy conversion

Why bankruptcy conversion?

  • You can no longer afford your monthly bankruptcy payments.
  • You no longer want to keep a house or car being paid through the plan.
  • You want to get out of bankruptcy. 
  • You were approved for a loan modification on your house eliminating the need to stay in Chapter 13.​
  • You filed jointly with your spouse and are now separated. (Bifurcation or dividing your cases may be another option)
  • The Court is about to dismiss your case anyway.

Why convert to Chapter 7?

  • You will no longer have bankruptcy payments.
  • You case will be closed within 4-6 months.
  • You can use money saved on payments for other necessities.
  • You can discharge new debts that have arisen since you first filed such as medical bills. 

Drawbacks of converting to Chapter 7

  • Any arrearage on houses, cars, or secured debt must be current or you risk repossession.
  • You may lose non-exempt property.
  • You will receive a Chapter 7 discharge instead of a Chapter 13 discharge, which may not look as good on your credit report.
  • Cram-down of secured debt may be forfeited.
  • Certain debts are only discharged in Chapter 13. (such as marital property debts)

Requirements to convert to Chapter 7

  • Have not received a Chapter 7 discharge within the prior 8 years.
  • A conversion fee of $25 to the Court and any applicable attorney fees.
  • Not covert in bad faith. 

What happens after converting to Chapter 7?

  • ​You must attend a new 341 creditor meeting in front of the Chapter 7 trustee.
  • A Chapter 7 discharge is usually granted within 4-6 month
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Contact us
  • Home
  • Firm Info
    • Contact Us >
      • Directions to Monroe office
    • Attorney Profiles >
      • Jason D. Witt
    • Fee Schedule
  • Family Law
    • Child Custody
    • Child Support
    • Divorce
    • Property Division
    • Alimony and Post-Separation Support
    • Separation Agreements
    • Domestic Violence Protective Order
  • Criminal Law
    • Traffic/DWI >
      • Traffic Tickets
      • Suspended or Revoked License
      • Driving While Impaired
    • Misdemeanors
    • Felonies
    • Expungements
  • Other Areas
    • Bankruptcy Law >
      • Personal Bankruptcy
      • Chapter 7 vs. 13
      • Bankruptcy Myths
      • NC Bankruptcy Exemptions
      • Bankruptcy Means Test
      • Bankruptcy Disclaimer
    • Debt Settlement
    • Foreclosure Defense
  • Blog