When you file a Chapter 13 case, you submit a repayment plan that lasts three to five years. A lot can happen during this time that impacts your finances. What can you do if unforeseen financial issues prevent you from being able to afford your monthly Chapter 13 plan payments? One option to consider is converting your bankruptcy to a Chapter 7 case.
The conversion process is relatively simple. We can help you determine if you qualify for a Chapter 7 filing. If you do, a Notice of Conversion is filed, the fees are paid, and most cases are converted to a Chapter 7 within several days.
Once your case has been converted, you will have a new Chapter 7 trustee appointed to supervise your filing. The Chapter 7 trustee will schedule a meeting of creditors as required under 11 U.S.C. §341. The Chapter 13 trustee will refund any payments that you made toward your plan that were not distributed to your creditors.
There are a few pleadings that must be filed in order to comply with the Chapter 7 requirements. For instance, a Chapter 7 debtor is required to file a Statement of Intent that outlines how you intend to handle the assets pledged as collateral under your secured loans. You will also want to amend your pleadings to inform the court of any debts incurred since the date you filed your Chapter 13 and any other changes that occurred prior to the conversion date. Once your pleadings have been updated to comply with the Chapter 7 requirements, your case proceeds as if you had originally filed it as a Chapter 7.
If you are in a Chapter 13 case and it is no longer working for you, let us help. Don’t let your case get dismissed. We can review your circumstances and determine if you are eligible to convert your case to Chapter 7. Call us to schedule a free consultation today.