Gilbert Bankruptcy Attorneys Explain How to Convert a Chapter 13 to a Chapter 7 Bankruptcy
You may wish to file for a Chapter 7 bankruptcy and get a total discharge of your debts, but you may not qualify, so you file for Chapter 13 bankruptcy instead. Or you may want to protect some assets, such as your vehicle or your home, so you opt for Chapter 13 instead. But what you may find is that after you have been paying on your Chapter 13 bankruptcy plan for a while, your circumstances change and you want to switch to a Chapter 7 bankruptcy. Is that possible? Yes. And a Gilbert bankruptcy attorney can help you.
Reasons to Convert
There are two reasons that you would need to convert from a Chapter 13 to a Chapter 7 bankruptcy: Your financial circumstances have changed, or your goals for the bankruptcy have changed.
If your financial circumstances have changed, you may be struggling to keep up with your Chapter 13 bankruptcy payments. Your income may have dropped, or you may have lost your job completely. In that case, you may be able to switch to a Chapter 7 bankruptcy because you can no longer afford the payments on your Chapter 13 repayment plan.
You may also wish to switch because your goals have changed. For example, you may have chosen Chapter 13 bankruptcy so that you could catch up on your late payments for your car and could keep the vehicle. But now, you may no longer wish to keep the vehicle, and you want to get the discharge that Chapter 7 bankruptcy allows.
If you find yourself facing either of these circumstances after entering a Chapter 13 bankruptcy, talk to a bankruptcy attorney about your options. You may be able to convert to a Chapter 7 bankruptcy.
Eligibility to Convert to Chapter 7 Bankruptcy
Of course, you won’t be able to just switch over to Chapter 7 bankruptcy because you want to – you’ll still have to meet the original eligibility criteria. Otherwise, everyone who couldn’t qualify for Chapter 7 at first would just file for Chapter 13 bankruptcy and convert later. Your bankruptcy attorney will review your finances to determine if the change in your circumstances has been enough to qualify you for Chapter 7 now.
You may be able to transfer some of the paperwork that you submitted for your Chapter 13 filing, but you are likely to have to fill out a lot of new paperwork. Work closely with your bankruptcy lawyer on this step as any mistakes you make could prove costly. You could even face penalties for some errors.
Forced Chapter 7 Bankruptcy Conversion
In some cases, the bankruptcy court may actually force a conversion from Chapter 13 to Chapter 7 bankruptcy. The circumstances for a forced conversion vary, but they include you not being able to keep up with your Chapter 13 payments and suspicion that you are abusing the bankruptcy system. Your bankruptcy lawyer will help you understand when a forced conversion may be imminent and why.
If you just miss a few Chapter 13 payments, that is unlikely to trigger a forced conversion. The bankruptcy court would likely just work with you to get current on the plan.
Always consult with a bankruptcy attorney to better understand how the bankruptcy laws apply to your situation. The laws can be complex, and not every person will have the same outcome under the system. Your attorney can help you understand how to use creative filings to get the results you need.
Contact Gilbert Bankruptcy Lawyers today to learn more about your options for debt relief through bankruptcy protection. We can help you with a new bankruptcy filing, or we can talk to you about converting your current bankruptcy filing. We’ll help you understand how you can get the maximum debt relief possible under the law. We offer our services with no money down, and we offer affordable rates to ensure that you have no barriers to getting the debt relief you need. We serve clients throughout Gilbert and the surrounding area. Call our bankruptcy law office today to schedule a free consultation with a bankruptcy attorney and learn more about your options.