Deadline to Convert From Chapter 13 to 7
- Chapter 13 debtors can convert to Chapter 7 bankruptcy pursuant to 11 U.S.C. §1307(a). The conversion can take place at any point during the Chapter 13 case. Federal Bankruptcy Procedure Rule 1017 requires the debtor file a notice of voluntary conversion with the bankruptcy court to change bankruptcy chapters. As of 2011, the filing fee to convert the case is $25. The bankruptcy court clerk accepts the payment when the notice of conversion is being filed. If the debtor retained legal counsel, the attorney can file the notice and submit the payment electronically to the bankruptcy court.
- The debtor must satisfy the Chapter 7 eligibility requirements at the time of the conversion. A Chapter 7 debtor needs to have an income that is not greater than the median income for his household size in the state. When the debtor's income exceeds the median income, he can still file a Chapter 7 case if the living expenses and allowable deductions result in a negligible amount of disposable income. Some debtors file a Chapter 13 case when their income is too high for Chapter 7 bankruptcy. If a debtor's income decreases due to job loss or salary reduction, he may fit the income restrictions for Chapter 7 at a later date.
- Filing updated schedules with the bankruptcy court is required by Federal Bankruptcy Procedure Rule 1019. Submit the latest income and living expenses information to the court. The Chapter 7 trustee assigned to the case may request documentation verifying changes to the income and expenses. Provide an update regarding any new creditors or debts that have accrued since the Chapter 13 case was filed. The trustee may schedule a meeting of creditors to question the debtor regarding the new information in the bankruptcy schedules. According to Federal Bankruptcy Procedure Rules 1007(b) and 1007(c), the debtor needs to file a financial management course certificate of completion within 60 days after the initial date scheduled for the meeting of creditors. The court will not discharge the case if the financial management course certificate is not filed.
- Some debtors seek bankruptcy protection multiple times. If the debtor already received a Chapter 7 discharge less than eight years before the current case was filed, the debtor is not eligible for another Chapter 7 discharge. Bankruptcy provision 11 U.S.C. §727 states the debtor may also not receive a Chapter 7 discharge if the court previously granted a Chapter 13 discharge less than six years before. Speak with the bankruptcy attorney to ensure all of the requirements are met to convert the case and get a discharge.
