Converting from a Chapter 13 to a Chapter 7 Bankruptcy
You may decide to opt for a Chapter 13 bankruptcy in order to protect assets. In a Chapter 7, the trustee can sell off non-exempt assets. If you wish to later bankruptcy to a Chapter 7, you should consider working with a Bryan bankruptcy lawyer.
Chapter 13 Bankruptcy
When you file for a Chapter 13 bankruptcy the court will provide you a modified repayment plan. The advantage of this over a Chapter 7 total liquidation is that with the latter the bankruptcy trustee has the power to sell off any of your non-exempt assets on behalf of your creditors. However, a Chapter 13 can last from 3 to 5 years. Many things can change in that time. You or your spouse may be laid off from work, you may have children, etc. These matters can affect your ability to continue making the agreed upon Chapter 13 payment.
Options If You Cannot Make Your Chapter 13 Payments
If circumstances arise that make it impossible for you to continue to make the monthly Chapter 13 payment, you do have options. One is simply to stop making payments. If you do this the court will dismiss your case. It will be like starting over. Unfortunately this means that your creditors will have the power to collect on your debt. Refiling for Chapter 13 protection within a year of defaulting on payments will generally limit your automatic stay to 30 days.
Another alternative is to request the court to modify your existing Chapter 13 bankruptcy. It will be necessary to provide the court with proof that your ability to pay on your bankruptcy has been adversely affected.
Finally, you may be able to convert to a Chapter 7 prior to dismissal of your Chapter 13 bankruptcy. In order to do this, however, you need to meet the requirements of a Chapter 7, including the means test. This test is designed to determine whether you have enough money left after bills each month to make a Chapter 13 payment. Assuming your ability to pay the amount you agreed upon originally, this should not be much of a problem. It is important to note, however, that you cannot file Chapter 7 if you have already done so in the past 8 years.
For Legal Assistance with Your Bankruptcy
It is very important that you include all necessary documentation with your bankruptcy request. Hiring a Bryan bankruptcy lawyer can help you to that end. Call Peterson Law Group to arrange a consultation at 979-703-7014 or 936-337-4681.