Can I Change Bankruptcy Chapters After I File?

Even if you don’t have much information about bankruptcy, you have probably heard that there are Chapter 7 cases and there are Chapter 13 cases. A Chapter 7 case is a liquidation of your debt, and it allows you to completely get rid of all of your unsecured debt. Unsecured debt is debt where there is no property pledged as security for repayment of the loan, like a credit card or a medical bill. By contrast, secured debt is that debt for which a piece of property is put up as collateral for the loan. Common forms of secured debt include auto and home loans. Being able to eliminate unsecured debt is one of the most popular reasons people prefer a Chapter 7 over a Chapter 13, but a Chapter 13 also has benefits. A Chapter 13 case is similar to a debt consolidation, and requires you to come up with a plan for repayment of your debts, including a portion of your unsecured debt. You are given up to 5 years to make all the payments under a Chapter 13 case, and for some people this is too long, but others like this structure because it reduces all of your debts to one monthly payment.

If you have decided to file bankruptcy and are not sure which chapter is best for you the first thing to know is that not everyone qualifies for a Chapter 7. But if you do and decide to file a Chapter 13 instead you might be wondering if you can change your mind later. You can, but there are some limitations, such as:

•         In order to convert from one chapter of bankruptcy to the other, the local rules might require you to ask the court for permission first.

•         If you are required to file an application to convert, we can help.

•         Once you get approval to convert, you have to file a notice of conversion in the case and will have to attend another initial meeting of creditors (the 341 meeting).

Converting bankruptcy chapters is not necessarily ideal, but in certain circumstances can benefit you. In order to find out if you are allowed to change your mind about the type of case you have filed, call our office for a review.

For more information about converting bankruptcy chapters, contact us today at www.law-ri.com. We will help you come up with solutions that work for your family, and have multiple locations where we schedule appointments so you can make a choice that is convenient for you.