In Some Circumstances The Bankruptcy Court Can Force You Go Convert From Chapter 13 To Chapter 7 You will also have to disclose if you have incurred any post-petition debts or acquired any post-petition assets while you were in the Chapter 13 case. If you have a mortgage, car loan, or other secured debt, you will also need to file a Statement of Intention to tell the court what you intend to do with the property securing that loan. The Court may also require a declaration explaining your reasons for converting. In some cases, to show that your financial circumstances have changed and that you can no longer afford to make Chapter 13 payments, you may need to file amended Schedules I and J to reflect your current budget. While you don’t have to file a new bankruptcy petition, you typically need to file additional forms and amend certain schedules after converting your bankruptcy. You will also need to attend a new meeting of creditors (also called the 341 hearing). When you convert your case, you will be assigned a new Chapter 7 bankruptcy trustee. What Happens When You Convert Your Bankruptcy? Also, keep in mind that even if the Court does not require you to comply with the means test when you convert, you may still have to explain to the court how your financial circumstances have changed and why you can no longer afford to be in a Chapter 13. If you filed a Chapter 13 bankruptcy because you could not qualify for a Chapter 7, you should discuss the matter with a knowledgeable bankruptcy attorney before converting your case. While some jurisdictions require debtors to pass the means test when they convert their Chapter 13 to Chapter 7, other courts have held that the means test is not applicable in a conversion. But bankruptcy courts are divided on whether the means test applies in a Chapter 7 case that was converted from a Chapter 13. To qualify for Chapter 7 bankruptcy, you normally have to pass a means test. they wish to surrender a property (such as a house or car) that the Chapter 13 was designed to save.they can no longer afford to make Chapter 13 plan payments due to a change in their financial circumstances, or. In general, most debtors convert their Chapter 13 bankruptcy to Chapter 7 because: However, keep in mind that you must still qualify for Chapter 7 bankruptcy in order to complete your case and receive a discharge (discussed below). To convert your Chapter 13 to a Chapter 7, you simply file a Notice of Conversion with the court and pay a conversion fee. Unless you have already received a Chapter 7 bankruptcy discharge within the last eight years, you can convert your Chapter 13 case to Chapter 7 at any time. If you can no longer afford to make your Chapter 13 bankruptcy plan payments, you may be able to convert your case to a Chapter 7.
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