Change your mind and need to convert your Chapter 13 bankruptcy to a Chapter 7 bankruptcy
It takes discipline and planning to live within your means and stick to a budget, and it’s easy to get sidetracked, especially if you experience unexpected setbacks like a job change or health issue. Sometimes no amount of planning will eliminate sudden or gradual debt. Even if you’re doing “good,” you may find that your finances need to change before you find yourself in trouble. If you have the income to keep up with some of your debts, but can’t make the full payments each month, you may want to seek a Chapter 13 bankruptcy. This would reconfigure your debts based on your income, which lowers your monthly payments. . You’ll make these lower payments over the course of 3-5 years, and at the end of that period, any remaining unsecured debt will be paid off. Filing for Chapter 13 can also help eliminate or reduce your debt while protecting your property and assets.
We will propose a reasonable payment plan to the court trustee, but there is no guarantee that a change in life circumstances will not make these payments unmanageable later on. If you cannot make your Chapter 13 payments, the court trustee may dismiss your case. At this time, your creditors could apply for relief from the automatic stay, which means you may have to catch up or face foreclosure or repossession.
changing my mind
If you can no longer keep up with your payment plan, you have a few options. Using your current situation, we can perform the means test to determine if you qualify for a Chapter 7 conversion. A Chapter 7 would end your repayment plan and cancel most types of debt. If you have loans secured on your car or home, there is a possibility that you will have to surrender this property, but we may be able to use the allowable exemptions to avoid this. Also, if these payments really exceed your budget, it may be better to get out of the payments.
Before making any financial decision, it is important to think things through; You can only convert your case once, so timing is critical. To convert your case, we will notify the court by filing a Notice of Conversion or Motion to Convert. The fees to convert are quite low, and some taxpayers receive a refund of previous Chapter 13 payments that have not yet been sent to their creditors. When you file Chapter 7, you can also include new debts you’ve incurred since your Chapter 13. This process takes a few days, and then you’re free from your payment plan.
flexible option
No one goes into debt with the intention of not making payments, but life can take some unexpected turns. In these cases, Chapter 13 gives you the opportunity to make some of the payments while also getting relief from debt that has become too much for you. Even after making this decision, circumstances sometimes change again and Chapter 7 becomes your best option. The US Bankruptcy Court has many plans available to help consumers with their debt, and I can help you get your finances in order through bankruptcy.
