Converting from Chapter 13 to Chapter 7 Bankruptcy

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