Can I switch to a Chapter 7 bankruptcy after filing for Chapter 13?
Find the Right Lawyer for Your Legal Issue!
Fast, Free, and Confidential
Yes, you can convert a Chapter 13 case to Chapter 7 bankruptcy at any time, for any reason, as long as you qualify for a Chapter 7 bankruptcy. You cannot avoid the qualifications for filing a Chapter 7 simply by converting a Chapter 13. You still need to meet the means testing requirements or the Court will refuse to convert the case.
The typical reason for converting is that you cannot meet the obligations of your payment plan due to changed circumstances. You should be aware that in doing so you will lose some of your property. Any property you own at the date of the conversion belongs to your Chapter 7 estate; unless that property is exempt, the trustee will be able to take it and sell it for the benefit of your creditors. In essence, the conversion resets the clock. If you have property that was exempt when you filed the Chapter 13 petition, it may have changed to non-exempt property by the time you convert, thereby putting that property at risk.
Furthermore, if you received a discharge in a Chapter 7 case filed within the six years preceding the filing date of the chapter 13 petition, you cannot receive a discharge in the converted case. There would not be much point in converting in that situation.
Depending on your situation, you may want to simply dismiss and re-file as a Chapter 7. Consult with a bankruptcy attorney before converting or dismissing to determine which will work best for your financial situation.