How To Change From Chapter 13 to Chapter 7 Bankruptcy

A Comprehensive Guide to Converting from Chapter 13 to Chapter 7 Bankruptcy

Understanding bankruptcy laws can be a daunting task. That’s where a trusted Honolulu bankruptcy attorney, like Blake Goodman, P.C., can guide you through the process. Bankruptcy chapters 13 and 7 differ significantly, each with its unique advantages and challenges. You might find yourself in a situation where you initially filed for Chapter 13 bankruptcy but now realize Chapter 7 could be a better fit. The good news is yes, you can convert your bankruptcy from Chapter 13 to Chapter 7. However, going through this transition is not easy and requires the expertise of an experienced bankruptcy attorney. It’s essential to understand the specifics of each chapter and the implications of such a conversion.

Why Would I Want to Convert to Chapter 7 Bankruptcy?

Chapter 13 bankruptcy, often referred to as a “wage earner’s plan,” allows individuals with regular income to develop a plan to repay all or part of their debts. However, changes in your financial situation may make keeping up with your Chapter 13 repayment plan challenging. If you find yourself in a situation where Chapter 13 bankruptcy is no longer viable, converting to Chapter 7 bankruptcy may become a more attractive option. Unlike Chapter 13, Chapter 7 involves a process of liquidating assets to repay debts without the need for a structured repayment plan. This conversion can provide a fresh start and relieve you from the burden of a repayment plan. To determine if transitioning to Chapter 7 is the right choice for your circumstances, seeking guidance from your Honolulu bankruptcy attorney is essential.

Steps to Convert from Chapter 13 to Chapter 7 Bankruptcy

Converting your bankruptcy case from Chapter 13 to Chapter 7 is a multi-step process that requires careful consideration and execution.

Evaluating Your Financial Situation and Eligibility

The first step is assessing your financial status and Chapter 7 eligibility. This includes your income, expenses, asset values, and existing debt. This process also involves the “means test” to determine income eligibility for Chapter 7. A Honolulu bankruptcy attorney can assist with this critical step, ensuring accurate evaluation and expert advice.

File a Notice of Conversion

Once you’ve decided to convert, the next step is filing a notice of conversion with the court. This document will notify the court, the trustee, and your creditors of your intention to switch your case to Chapter 7.

Attend the Meeting of Creditors

After the conversion notice is filed, you’ll be required to attend a meeting of creditors, also known as a 341 meeting. Here, you’ll answer questions about your financial situation and your decision to convert. Your attorney will prepare you for this meeting and guide you through it. In conclusion, converting from Chapter 13 to Chapter 7 bankruptcy involves evaluating your financial situation, filing a notice of conversion, and attending a meeting of creditors. Seeking the guidance of a knowledgeable Honolulu bankruptcy attorney throughout these steps will help facilitate a successful modification, ensuring your transition to Chapter 7 bankruptcy is conducted by legal requirements and with the best possible outcome for your financial situation.

What are the Potential Challenges in Conversion?

Going from a Chapter 13 bankruptcy to a Chapter 7 one has potential challenges. While it can relieve you from the obligations of a Chapter 13 payment plan, you may have to surrender non-exempt assets for liquidation. Additionally, not everyone qualifies for filing a Chapter 7 bankruptcy. You must meet certain income requirements, and if you’ve received a Chapter 7 discharge in the last eight years, you can’t convert. Your Honolulu bankruptcy attorney will thoroughly explain these potential challenges and help you weigh the pros and cons.

Why You Need a Bankruptcy Attorney

The complexities of bankruptcy law make the guidance of an experienced attorney essential. Without an attorney, you may overlook critical details or make errors that could have lasting impacts on your financial life.

Get in Touch with Blake Goodman, P.C.

Ready to discuss converting your bankruptcy case from Chapter 13 to Chapter 7? Blake Goodman, P.C., your trusted Honolulu bankruptcy attorney, is here to guide you every step of the way. With years of experience in bankruptcy law, we offer expert advice tailored to your unique situation. Don’t wait to take control of your financial future. Contact us today and let’s navigate your bankruptcy conversion together.