Choosing Liquidation of Debt over Reorganization
You’ve been experiencing financial difficulties and concluded that a personal bankruptcy filing is the best way forward. You wanted to keep all your assets, if possible, so you initially opted to file for reorganization of your debts under Chapter 13. It has become clear, though, that your financial situation isn’t going to improve in the near future. Maybe you’re unable to make the payments you agreed to when you sought protection under Chapter 13. Is it possible to convert your Chapter 13 bankruptcy filing to a Chapter 7, so that you can permanently discharge some of your debts?
Qualifying to Convert from Chapter 13 to Chapter 7
As a general rule, you can always convert a Chapter 13 to a Chapter 7, with one caveat—you must not have discharged debt in Chapter 7 within the last 8 years. There’s a fee to convert from Chapter 13 to Chapter 7 and you must file a “Notice of Conversion” with the bankruptcy court. Furthermore, you must be eligible to file under Chapter 7. That means you must submit to a “means test,” whereby you demonstrate to the court that you lack the resources to repay your creditors through a Chapter 13 proceeding.
What Is Involved When You Request a Transfer from Chapter 13 to Chapter 7?
Provided you meet the criteria and the court approves your transfer, you will be assigned a new Chapter 7 bankruptcy trustee. In addition, you’ll need to participate in a 341 meeting with creditors (even if you already met with creditors as part of the Chapter 13 proceeding). In most instances, you won’t have to file a new bankruptcy petition, but you’ll likely have to submit some new forms and may need to amend some of the schedules you previously submitted.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
You can convert a Chapter 13 bankruptcy filing to a Chapter 7 liquidation At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County and the surrounding counties.
