Converting a case from Chapter 13 to Chapter 7

Posted by Kevin Ryan | Sep 02, 2017 | 0 Comments

In some cases, it will make sense to consider converting a Chapter 13 case to a Case under Chapter 7.  The first question that needs to be answered is whether you are eligible to proceed under Chapter 7 by converting your case.  You must verify that it was over eight (8) years since the filing date of a prior Ch 7 ( where you received a Discharge) from the filing date of the Chapter 13 case.  If it was less than eight (8) years, then you need to look at whether you can file a motion to dismiss the Chapter 13 and then file Chapter 7.  Filing a new case will reset the bankruptcy "look-back" period which determines whether you can convert to or dismiss the Ch 13 and file under Chapter 7. 

The advantage of converting to Chapter 7 from Chapter 13 is that you will only have to pay an additional $25.00 filing fee.  Additionally, you are not required to re-qualify under the bankruptcy Means Test.  Your income and expense schedules should show a change in circumstances where your income is now a little bit less ( at least) than your household expenses.  The Bankruptcy Court needs to see evidence that you can no longer afford the Chapter 13 Plan payments.   

Another consideration before you convert to Chapter 7 from Chapter 13 is whether you are paying off a vehicle loan inside your Chapter 13 Plan. Converting to Chapter 7 will cause the auto loan to, in most cases, go into default status because the loan was stretched out in the Chapter 13 Plan, most likely at a lowered interest rate. In many Chapter 13 Plans, the loan can be "crammed down," meaning only the fair market value of the vehicle is considered a higher priority secured debt (which must get paid, with interest).  

Converting to Chapter 7 from Chapter 13 is not automatic. You should always discuss the options available with your attorneys before making any moves on your case.   

About the Author

Kevin Ryan

"I'll never be the kind of attorney your creditors want me to be. I'll always be the kind of attorney you NEED me to be. Call me. I'll BE there for you. And I'll make them go away."  -Kevin Ryan, Attorney at Law Kevin Ryan is a graduate of the College of Wooster and the Cleveland Marshall College of Law. He is admitted to practice before all Alabama State Courts, the United States District Court for the Southern District of Alabama, and the United States Bankruptcy Court for the Southern District of Alabama. The United States Bankruptcy Court is a part of the United States District Court. Since 1998, Mr. Ryan has represented thousands of individual clients in bankruptcy, criminal, divorce, probate, personal injury, and real estate matters.  Attorney Ryan is also a licensed real estate agent in Alabama.  He handles  Bank-owned properties, short sales, and conventional sales in addition to conventional real estate listings.   This wide range of experience enables Attorney Ryan to take a wider look at your legal matter. It is important to consult with an attorney who can see from experience how other legal issues may affect your situation, and advise you accordingly. Personal Info Kevin Ryan is a member of First Baptist Church in Silverhill, Alabama. He resides in Silverhill with his wife Jessica and their three children. Committed to helping our Clients achieve a fresh financial start Our practice focuses primarily on consumer bankruptcy matters under Chapter 7 and Chapter 13 of the United States Bankruptcy Code.  Our law practice also includes matters where bankruptcy litigation, appellate work, or involvement in civil lawsuits is needed by a client.     No representation is made that the quality of any of these legal services is of higher quality than another attorney or law firm.   The United States Bankruptcy Code requires the following notice:  We are a Debt Relief Agency, which means we help people get legal relief from their Debts through the bankruptcy process. Interested in learning more about our bankruptcy attorney near Mobile, Alabama? Contact Us for help with chapter 7 bankruptcy or chapter 13 bankruptcy in Mobile, Baldwin and Washington counties. Education Juris Doctor, Cleveland Marshall College of Law, 1997 Employed full time as a paralegal while attending law school in the evenings. B.A., The College of Wooster, 1994 NCAA Div.III All Conference (N.C.A.C.) Football Team : Defense 1993; Most Inspirational Senior Award 1993; Co-captain 1993; Letterman 1991-1993; Phi Sigma Alapha Fraternity 1991-1994; Athletic Director Jurisdictions Admitted to Practice Alabama


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I'll BE there for you.

I'll never be the kind of attorney your creditors want me to be. I'll always be the kind of attorney you NEED me to be. Call me. I'll BE there for you. - Kevin Ryan, Attorney at Law