If you already filed bankruptcy in Tennessee or Georgia, and you suspect that you might benefit from changing to another type of bankruptcy, get in touch with your bankruptcy attorney immediately to discuss your options.
If You Filed Chapter 13, but are Unable to Complete Your Repayment Plan:
Unfortunately, some petitioners who file Chapter13 bankruptcy are unable to complete their repayment plan as agreed. During a Chapter 13 bankruptcy, petitioners have to repay specific debts in full. A couple of examples of obligations that would require full payment include child support owed and back taxes. The filer’s disposable income (as defined by the law) is paid into the repayment plan as a monthly payment.
In some cases, the monthly payment required to fulfill the terms of the Chapter 13 bankruptcy repayment plan is too large for filers to meet while still paying their other bills. Sometimes circumstances change months into the plan. For instance, the bankruptcy filer may lose their job or become disabled, etc. and experience a significant decrease in income. In this type of situation, it would be a good idea to consider whether or not converting the Chapter 13 bankruptcy case to a Chapter 7 bankruptcy case would be a good idea. Discuss the process of converting from a Chapter 13 to a Chapter 7 with your bankruptcy attorney. Sometimes folks change attorneys to convert from Chapter 13 to Chapter 7.
If You Filed Chapter 7 Bankruptcy, but Need to Convert to Chapter 13 Bankruptcy:
Most filers prefer the benefits of Chapter 7 bankruptcy because it quickly discharges all qualifying debt and does not require a repayment plan like the Chapter 13 bankruptcy, but it can sometimes be beneficial or necessary to convert from Chapter 7 bankruptcy to Chapter 13 bankruptcy. A bankruptcy petitioner may decide after filing for Chapter 7 bankruptcy that Chapter 13 is a better option. In other cases, the court may require a petitioner to convert to a Chapter 13 bankruptcy. A petitioner may decide voluntarily to convert from a Chapter 7 bankruptcy to a Chapter 13 bankruptcy for a number of reasons: due to a change in financial circumstances that occurred since they filed their bankruptcy petition, because they forgot to disclose a valuable asset, they realized they won’t be able to discharge a certain significant debt, or they realized they run the risk of losing valuable property they aren’t willing to lose if filing for Chapter 7 bankruptcy.
The court may order a bankruptcy petitioner to convert from Chapter 7 to Chapter 13 bankruptcy. When this occurs, it is usually due to a mistake on the Chapter 7 means test used to determine eligibility. Failing the Chapter 7 means test means that after analyzing the information, the court determined you can afford a reasonable monthly payment towards your debt through a repayment plan. In this situation, petitioners have the option to convert to Chapter 13 bankruptcy.
If you need to discuss converting from one type of bankruptcy to another or if you need answers about the benefits of filing different types of bankruptcy, please don’t hesitate to get in touch with the law offices of Kenneth C. Rannick P.C. Our Tennessee and Georgia Bankruptcy Lawyers have the knowledge and experience to help you get on the road to recovery.