Convert Dismiss Chapter 13 7

Bankruptcy is normally voluntary – unless you have hidden assets or filed somehow in bad faith.  You normally have the right to dismiss your bankruptcy case or convert from one Bankruptcy Chapter to another.   It is easy to convert from Chapter 7 to a Chapter 13 normally, and there can be benefits to converting from a Chapter 13 to a Chapter 7.  If you start your case as a Chapter 13 and you are unable to make the payments later you have a lower level of review for a means test if you need to convert to a Chapter 7. 

The right to dismiss or convert isnt absolute or perfect for Chapter 7.    If you ask for a dismissal of a Chapter 7 the court will usually hold a hearing to hear why you want it dismissed.   If you hide assets in a Chapter 7 and later attempt to dismiss your case or convert to a Chapter 13 the Trustee has the right to object.   The Trustee earns fees for taking property and if you file and hide assets or file in “bad faith” converting to Chapter 13 or attempting to dismiss a Chapter 7 case will not avoid the Trustee objecting to conversion or dismissal and coming after the asset.   The code requires the court “shall” dismiss a 13 at a Debtors request and may convert to a Chapter 7 if appropriate.

So why convert or dismiss a case.   Stuff happens.   Occasionally a person will have a promotion or increase in pay which requires that they repay some of their debt in a 13.  Other times they become disabled, divorced, a death in the family occurs unemployed etc and can’t make the payments in a Chapter 13.   They may need to protect a comaker.  In a Chapter 7 comakers are not protected but as long as the payments are being made they are in a Chapter 13.   Or they may need to deal with  student loan debt, foreclosure, income tax, child support or car issues that they just cant cure in one Chapter but that they can in another.  You have to review what your goals are in filing bankruptcy and work together with your attorney to obtain those goals. 

Nick C. Thompson  Louisville Kentucky Bankruptcy Attorney