If you are unable to afford your payments under a Chapter 13 bankruptcy repayment plan, you may have the ability to convert your case into Chapter 7 bankruptcy instead, unless you already received a Chapter 7 discharge at any time in the last eight years.
The process of converting your case is relatively simple; however, you still must qualify for Chapter 7 bankruptcy to convert your case.
The most common reasons people convert from Chapter 13 to Chapter 7 are the following:
- A change in their financial circumstances has rendered them unable to meet their Chapter 13 repayment plan payments.
- They would like to surrender a specific piece of property (such as a car or house) that the Chapter 13 plan had specifically been designed to protect.
To qualify for Chapter 7 bankruptcy, you will have to pass the means test. Once your case has been converted, you will be assigned a bankruptcy trustee and will need to attend a meeting of creditors. You don’t need to file a completely new bankruptcy petition, but you will also have to amend certain forms and schedules to reflect your new case status.
For example, your Schedule I and J forms will need to be changed so that they reflect your most up-to-date budget. Some courts may require you to make a declaration outlining the reasons you filed for a conversion.
In some circumstances, courts may actually force you to convert your case from Chapter 13 to Chapter 7 to sell off assets to pay your creditors. This might be true if you were found to be hiding assets, lying on your bankruptcy papers or filing only to delay your creditors.
For further guidance on converting from Chapter 13 to Chapter 7, consult a skilled Georgia bankruptcy attorney by contacting Jeff Field & Associates online or at 404-381-1278.