Converting A Bankruptcy Case: What To Know

If you are considering the possibility of filing for consumer bankruptcy in Florida, you should be working with an experienced St. Petersburg bankruptcy attorney who can help you to understand your eligibility for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Generally speaking, debtors are not typically eligible for both types of bankruptcy since these distinct forms of bankruptcy have particular requirements that are often incompatible with one another. To be sure, eligibility for Chapter 7 bankruptcy requires a consumer to pass the “means test” by showing that she has so few assets and income that a liquidation bankruptcy makes sense and would not constitute abuse. Differently, eligibility for Chapter 13 bankruptcy requires a consumer to show that she is a regular wage earner and will be able to make monthly payments, for a period of usually three to five years, on a debt reorganization plan.

While many people file for personal bankruptcy and see the case through to the discharge at the end, various scenarios can arise that require a debtor to inquire about converting a bankruptcy case from one chapter to another. In most situations, this question concerns converting from a Chapter 13 bankruptcy case to a Chapter 7 bankruptcy. At the same time, a debtor also may want to convert from Chapter 7 to Chapter 13 bankruptcy. Is this kind of action permitted under the U.S. Bankruptcy Code? In short, converting bankruptcy chapters is possible in some situations.

Converting from Chapter 13 to Chapter 7 Bankruptcy 

Sometimes financial circumstances can change and a debtor cannot afford to make the payments associated with a Chapter 13 bankruptcy plan. If a debtor loses his or her job, for example, it may be possible to convert to a Chapter 7 bankruptcy. To do so, you will need to prove that you are eligible for Chapter 7 bankruptcy (typically by passing the means test), and then you can often convert your case. Before you convert to Chapter 7, you will want to ensure that your debts are dischargeable. Then, you will go through much of the same process you would have if you had started with a Chapter 7 bankruptcy filing instead of Chapter 13.

In some Chapter 13 bankruptcy cases, the court can actually order a debtor to convert to Chapter 7 when there is cause to do so.

Converting from Chapter 7 Bankruptcy to Chapter 13 Bankruptcy 

Sometimes debtors want to convert from Chapter 7 to Chapter 13 to avoid having property liquidated or to avoid foreclosure and remain in the property. In some cases, a debtor may have accidentally failed to disclose a particular asset and may want to convert to Chapter 13 to avoid concerns. To convert to Chapter 13, you must be able to prove you are eligible just as if you were initially filing for Chapter 13 bankruptcy.

You cannot convert your case if you previously converted from Chapter 13 to Chapter 7.

Contact Our St. Petersburg Bankruptcy Lawyers 

Do you have questions about converting your bankruptcy case from Chapter 13 to Chapter 7 or vice versa? At the Law Offices of Stephen Barszcz, we know that circumstances can shift and that it may be necessary to make changes to your bankruptcy case. One of our experienced St. Petersburg bankruptcy attorneys can talk with you today about the particular facts of your case and your options for converting from Chapter 13 to Chapter 7, or from Chapter 7 to Chapter 13.  Contact the Law Offices of Stephen Barszcz today to get started with our bankruptcy lawyers.

Resource:

law.cornell.edu/uscode/text/11