In some circumstances, a borrower may need to convert their Chapter 13 bankruptcy into a Chapter 7 bankruptcy. For example, this may occur when a borrower in Chapter 13 is unable to make the payments required under the Chapter 13 payment plan. If that were to occur, converting to Chapter 7 may be the best option. Both Chapter 7 and 13 bankruptcies are designed to provide debt relief for borrowers seeking help from overwhelming debt. However, there are many key differences between Chapter 7 and Chapter 13 bankruptcy. Under Chapter 7 bankruptcy, your debt will be discharged in exchange for liquidating your non-exempt assets. On the other hand, under Chapter 13 you set up a three-to-five-year payment plan that is based on your income, and you will not be required to liquidate any assets.
Under bankruptcy law, you have the right to convert a Chapter 13 bankruptcy into a Chapter 7 if you satisfy the Chapter 7 eligibility requirements. For instance, you will have to prove that you pass the Bankruptcy Means Test before the court approves your Chapter 13 conversion in Florida. The Means Test requires applicants to earn income below the specified amount in order to be eligible for Chapter 7 bankruptcy. Determining eligibility for Chapter 7 can be complex and confusing without competent legal representation. If you are considering filing for Chapter 7 or doing a Chapter 13 conversion contact us to schedule a free consultation with a Tampa bankruptcy attorney at our Florida Law Advisers, P.A. During the consultation, a bankruptcy lawyer will answer your questions and develop a comprehensive plan to help alleviate your financial troubles.
Not all conversions are voluntary; a bankruptcy court can legally force you to convert your Chapter 13 bankruptcy into a Chapter 7. However, in order to force a Chapter 13 conversion in Florida, the bankruptcy trustee will need to show there are legal grounds to force the conversion.
Legal grounds for a forced conversion include:
- Failure to submit required Chapter 13 payments on time
- Unreasonable delay caused by the borrower that poses harm to creditors
- Failure to file a Chapter 13 payment plan by the specified time
- Loss of employment
Consult With a Bankruptcy Attorney in the Tampa Bay Area Today
If you are having a difficult time meeting your financial obligations Florida Law Advisers, P.A., may be able to help. Our Tampa bankruptcy attorneys have years of experience helping people just like you solve their financial problems and obtain a fresh start. We dedicate all of our experience and skills in the courtroom to help achieve the results our clients need and deserve. When you hire Florida Law Advisers, P.A., you don’t just get legal advice, you get experienced attorneys by your side every step of the way.
Florida Law Advisers, P.A., is a customer-service-oriented law firm with a strong reputation for providing personalized attention and dedicated legal counsel. Regardless if you need help initiating a bankruptcy or converting your existing bankruptcy our professional legal team will provide you with the competent legal advice you can trust. Contact us with questions about bankruptcy law or to schedule a free consultation with a Florida bankruptcy lawyer.
Frequently Asked Questions
Yes, you may have the right to change your Chapter 13 bankruptcy to Chapter 7, if you satisfy the Chapter 7 eligibility requirements. For instance, you will have to pass the Chapter 7 means test.
Converting a Chapter 13 to Chapter 7 is commonly referred to as a chapter 20 case, since the borrower gets the benefits of both Chapter 13 and 7. For instance, you may be able to modify a home mortgage with Chapter 13 and then convert to discharge the credit card bills in Chapter 7.
In some situations, it can be very beneficial to convert to Chapter 7. For instance, credit cards and other forms of unsecured debts are discharged in Chapter 7. On the other hand, a portion or all of the debts may need to be paid in Chapter 13.
The United States Bankruptcy Court for the Middle District Court of Florida charges a filing fee of $25.00 to covert a Chapter 13 to 7. The filing fee to convert a Chapter 13 to Chapter 11 is $932.00.