22 Aug Converting a Chapter 7 case to a Chapter 13 bankruptcy
My friend and colleague, Brett Weiss, wrote a great post on converting a Chapter 13 bankruptcy to a Chapter 7 bankruptcy. He pointed out a number of good reasons to do it, and a number of benefits.
But what if you’re in a Chapter 7, and get behind in your home or car payments? Under those circumstances it would be nice to be in a Chapter 13 where you can make payments and stop a foreclosure or car repossession.
The answer is that although it’s not as easy as it is to convert from a Chapter 13 to a Chapter 7, you can convert the other way by filing a noticed motion with the court. All you really need is a good reason, and the court will convert the case for you. There are rules about converting for “bad faith” or if you have already converted the case before, but generally, requests for conversions are granted.
Now you can file a Chapter 13 plan, build into it enough of a monthly payment to get caught up on house or car payments, and stop the foreclosure or repossession.
Just like converting to a Chapter 7, there are updates of the forms you will need to file and some debts might be treated differently. You will need to prepare and have a plan confirmed with the court, and there will be a new trustee appointed and a further meeting of creditors to attend.
All in all, the process isn’t too onerous and the benefit of saving your home and/or car is well worth it. Don’t try it by yourself: there are too many traps and tricks for the unwary. But a competent bankruptcy attorney will have no trouble guiding you through the process.
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