Conversion to a Chapter 13 Bankruptcy

While not very common, you can change your Chapter 7 liquidation bankruptcy to a Chapter 13 reorganization bankruptcy.  If you filed Chapter 7 bankruptcy and made more money than your state’s median, you will not be able to pass the mandatory means test. Your trustee or creditor can file a motion to have your filing considered abusive. If the court agrees, you will be asked if you want to dismiss your Chapter 7 case or convert it to a Chapter 13 bankruptcy. If you agree to the conversion, the judge will order it.

Payments

You will have to file a repayment plan within 15 days of the conversion. You must start making payments within 30 days after you submit a repayment plan. If your plan is approved, the money will be distributed to your creditors. You will be making the payments for 36 to 60 months.  If your plan is not approved even after several attempts your case will be dismissed, and you will get your money back less any administrative fees.

Convert to Chapter 7

It is more common for Chapter 13 bankruptcy to be converted to a Chapter 7 bankruptcy for reasons like:

• Unable to make your monthly payments to the court due to job loss or illness.
• You wish to surrender secured property you were trying to save in Chapter 13.
• If you have not received a Chapter 7 discharge in the last seven years.

If you need help deciding what type of bankruptcy to file, contact a Rio Grande bankruptcy attorney to find out how you can get financial relief.