The easy answer to the question of whether or not you can convert from one type of bankruptcy to another is: “Yes, most of the time.” Don’t you love those qualifiers? The best way to explain the “most of the time” is to provide examples of when you can and cannot convert a bankruptcy. However, to avoid making this too complex, we will not address converting if you have been in a previous Chapter 7 bankruptcy, since filing limitations will be addressed in another blog.
| Conversion from/to Bankruptcy Status | Example | Can I Convert? |
|---|---|---|
| Chapter 13 bankruptcy to Chapter 7 bankruptcy | I am in a Chapter 13 bankruptcy but I’ve lost my job. With my household income, I can’t afford to keep my house and/or car. | Yes, you can convert to Chapter 7 bankruptcy and surrender or give up your house and/or car. This will eliminate the payments to the Chapter 13 Trustee but you will no longer be able to keep the house or car. However, this approach allows you to obtain a fresh financial start. |
| Chapter 13 bankruptcy to Chapter 7 bankruptcy | I am in a Chapter 13 bankruptcy and my income has not changed. I’m just tired of making the bankruptcy payments to the Chapter 13 Trustee! | Maybe (you knew this was coming) No, If your income has not changed and you were required to file Chapter 13 bankruptcy because you did not qualify for Chapter 7 bankruptcy under the Means Test. You will most likely not qualify to convert to Chapter 7 bankruptcy in this example, but each bankruptcy case must be looked at individually. Yes, If you were not behind on your house or car and your income allowed you to file Chapter 7 initially. In this case, you filed Chapter 13 because you wanted to pay something back to your creditors. In this example, you should qualify to convert to Chapter 7 bankruptcy. No, If you filed Chapter 13 bankruptcy because you were behind on a house or car payment, you cannot convert to Chapter 7 and keep your house or car unless you have brought your payments current or modified your loans. |
| Chapter 7 bankruptcy to Chapter 13 bankruptcy | I am currently in a Chapter 7 bankruptcy and have gotten behind on my house or car payment. | Yes, as long as you have enough income to make the Chapter 13 payments along with your other monthly expenses.
No, if you do not have enough income to make the Chapter 13 plan payments along with your other monthly expenses. You must qualify to file a Chapter 13 bankruptcy by demonstrating you have income household income to make the |
As with all bankruptcy issues, you should consult your bankruptcy attorney to determine if you qualify to convert your bankruptcy.
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