Converting from Chapter 7 to Chapter 13

17 Feb Converting from Chapter 7 to Chapter 13

One of the things left intact by BAPCPA, the 2005 bankruptcy act, is the ability to convert from one chapter of the bankruptcy code to another. Thus, even though you filed a chapter 7 bankruptcy, you can convert it to a chapter 13 if you need to do so.

There are a number of reasons why you might want to do this. For example, if you find yourself behind in your house payment, thought you would catch up in the chapter 7, but can’t, converting to a chapter 13 will stop a foreclosure and give you a chance to get caught up.

On the other side of things, if you filed a chapter 13 – to save your home from foreclosure – for example; and now realize you aren’t going to keep the house anyway, you can convert to a chapter 7, let the house go, and discharge your unsecured debt.

There are a couple of things to watch out for. First of all, you can only convert once without court approval, so if you need to convert again you’ll have to file a noticed motion and convince the court it is in the best interest of your creditors.

Secondly, some of your debts and property is treated differently in a chapter 7 as opposed to a chapter 13. And the continuing obligations of a chapter 13 are much different than a chapter 7.

The best thing to do, of course, if your are contemplating converting yoru case or think it might be a good idea, is to consult a competent bankruptcy attorney.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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