Our office continues to operate during our regular business hours, which are 8:30 am - 5:30 pm, Monday through Friday, but you can call the office 24 hours a day. We continue to follow all recommendations and requirements of the State of Emergency Stay at Home Order. Consultations are available via telephone or by video conference. The safety of our clients and employees is of the utmost importance and, therefore, in-person meetings are not available at this time except for emergencies or absolutely essential legal services.

Converting From Chapter 13 to Chapter 7 Bankruptcy

Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What is Chapter 13 bankruptcy?”

Though most people hope to file for bankruptcy protection once and then move on with their lives, the reality is that in some cases it is necessary to convert your initial Chapter 13 bankruptcy case into a Chapter 7 case. This conversion can occur by choice or can be forced by the bankruptcy court in some circumstances.


Debt Letter blocks Charlotte Bankruptcy Lawyer North Carolina Debt Collection AttorneyWhy would anyone want to convert?


So why would a person want to switch from a Chapter 13 to a Chapter 7? For one thing, it’s possible that your financial circumstances have changed and you are no longer able to make payments under the Chapter 13 plan worked out with your creditors. It’s also possible that you filed Chapter 13 so that you could keep certain items of personal property that you now are not interested in holding onto, perhaps your home or a car.


Forced conversion


It’s also possible that a court orders you to convert a Chapter 13 into a Chapter 7. This can also happen for a variety of reasons, including when a debtor makes late payments as part of the Chapter 13 plan or fails to make payments at all. These issues with the Chapter 13 payment plan might be enough to prompt the judge to force you to change to a Chapter 7.


Restrictions on conversion


The law says that anyone has the right to convert his or her bankruptcy from a Chapter 13 into a Chapter 7 case at any time. The only caveat is that the conversion cannot happen if you have previously filed and been discharged from a Chapter 7 bankruptcy in the previous eight years.


Will the conversion be approved?


Though anyone is allowed to try and convert, that does not mean that everyone is guaranteed to be approved for a conversion into a Chapter 7. That’s because many bankruptcy courts say you must first pass a means test to be eligible to file for Chapter 7 relief. To do this, the court looks at your family’s income and expenses and compares these figures to averages for your state of residence. Not all bankruptcy courts agree that a means test is necessary in converted Chapter 7 cases, especially those where the debtor’s financial situation has seriously deteriorated since the original Chapter 13 was filed.


If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.


About The Author: 

Bryan 1  Bryan Stone is a Partner with Arnold & Smith, PLLC where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord tenant issues.  Originally from Macon Georgia, Mr. Stone attended the University of Georgia for a BBA in Banking and Finance and went on to Wake Forest to earn his law degree.  After law school Mr. Stone relocated to Charlotte where he has become quite involved in many local organizations.  He is currently the Chair of “Bravo!” the young professionals organization of Opera Carolina, he also founded the UGA Alumni Association of Charlotte.  In his spare time he enjoys perfecting his BBQ skills for the annual “Q-City BBQ Championships” and playing softball with the Mecklenburg County Bar Softball League.


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