A Bankruptcy Lawyer can Convert Your Filing

If you file for Chapter 13 bankruptcy protection and then a change occurs which makes Chapter 7 a better route for you to take, a bankruptcy lawyer can help you make the transition.

The conversion can be done but several legal steps have to be taken. A lawyer can make the steps happen much easier than an individual can on his or her own. Know that the two bankruptcy conditions are quite different. Chapter 13 is a repayment program, while Chapter 7 is a legal process in which many debts are wiped away and the petitioner starts with a clean financial slate.

Just how much of a fresh start you get with a Chapter 7 filing does depend on your debts, income, assets and state exemptions. Even under Chapter 7, secured debts, tax liabilities, child support and alimony are not erased. However, credit-card debt, court judgments, medical bills and other unsecured debt are wiped from the slate with a Chapter 7 bankruptcy filing. For individuals with few or no assets, Chapter 7 can be the best option.

Making the change from a Chapter 13 bankruptcy to a Chapter 7 starts with your bankruptcy lawyer. An attorney well versed in this law can walk you through what steps will take place with the conversion and just what obligations you will have to meet. There has to be some reason for the bankruptcy to be converted from a Chapter 13 to a Chapter 7.

For individuals struggling to make Chapter 13 repayments, steps can be taken by the bankruptcy trustee to assist the petitioner with payments. This step normally occurs before any transition from Chapter 13 to Chapter 7 happens. In some cases, when the individual is struggling to make repayments, the bankruptcy trustee may even suggest converting a Chapter 13 to a Chapter 7. The trustee can also put the brakes on a conversion should he or she feel that the petitioner has been making repayments and has the means to continue with repayments under a Chapter 13 bankruptcy.

In cases where an income has been lost or expenses have risen sharply due to a major event, the conversion to Chapter 7 can be put on a fast track.

Remember that converting to a Chapter 7 bankruptcy requires meeting all of the chapter's criteria, including passing the Means Test. In some jurisdictions, you will also have to conduct a second bankruptcy filing to make the conversion happen. That requires listing all your assets once again and a bankruptcy trustee seizing all assets not exempted and selling them in order to pay creditors.

It is always a good idea to have a bankruptcy attorney represent you. There are many legal pitfalls along the way and having a lawyer on your side to represent you can help avoid problems. A bankruptcy attorney is well versed in the law and can provide specific instructions on converting from a Chapter 13 bankruptcy to a Chapter 7. Your lawyer can also help explain what stipulations will be required of you along the way.