Unexpected life events can lead even financially responsible individuals to overwhelming debt. If you find yourself in this situation, bankruptcy may be a viable option. Once you initiate the bankruptcy process, you might wonder whether you can convert your case from one chapter to another. Please continue reading as we explore what you should know about these matters and how our determined Rapid City Bankruptcy Lawyers can help you navigate the complexities of this process.
What Are Common Reasons for Converting a Bankruptcy Case?
There are several reasons why a debtor may consider converting their bankruptcy case from one chapter to another. However, the most common reason is a significant change in financial circumstances. For instance, if you can no longer afford the repayment plan in a Chapter 13 case, you might consider converting to a Chapter 7, which typically offers a quicker discharge of eligible debts. Conversely, if you filed Chapter 7 but are concerned about losing valuable property, you might convert to Chapter 13 to retain ownership of certain assets by making payments over time.
Chapter 13 aims to help debtors retain their property by enabling them to resolve overdue payments. However, if a debtor elects to surrender property, they may opt to convert their case to Chapter 7, which involves liquidating assets. It’s important to note that if a debtor makes a mistake on their Chapter 7 petition or fails to disclose all of their assets, the court may require them to convert to Chapter 13. Additionally, creditors may request that a Chapter 7 case be converted to a Chapter 13 to potentially recoup more money than they would have in the Chapter 7 liquidation process. The court could also order a conversion if it’s determined that the debtor is not eligible for the original chapter they filed under.
Can I Convert My Bankruptcy Case from One Chapter to Another?
Generally, it’s possible to change the type of bankruptcy case you are in. However, there are eligibility requirements for each chapter, meaning you will need to meet certain criteria to qualify, such as passing the means test, before converting. You can typically cover from Chapter 7 to Chapter 13, or vice versa. There are some restrictions on how often you can convert between chapters, and you may ned to wait a certain amount of time after a Chapter 7 discharge before you can convert to Chapter 13.
When you convert your bankruptcy case, you will usually be assigned a new trustee. You will need to attend another 341 meeting. Although you don’t normally need to file a new bankruptcy petition, you will need to file additional forms and amend certain schedules after converting your case.
If you are currently navigating a bankruptcy case and hoping to convert your case to a different chapter, it’s in your best interest to consult with an experienced attorney from 605 Bankruptcy, who can help you explore the options available based on the unique circumstances of your situation. Connect with our firm today to learn how we can assist you during these challenging times.
