Sometimes Chapter 13 bankruptcy petitioners experience a significant life change during their three or five year Chapter 13 bankruptcy payment plan and need to modify their monthly plan payments. Modifying your Chapter 13 bankruptcy monthly payment amount is possible. Still, there are also times when a Chapter 13 bankruptcy no longer works for the petitioner, and Chapter 13 needs to be converted to Chapter 7 bankruptcy. When a significant life change requires changing a Chapter 13 to a Chapter 7, many petitioners worry about their home.
Will You Lose Your House If You Convert Your Chapter 13 to Chapter 7?
How your home will be handled when converting from Chapter 13 to Chapter 7 bankruptcy depends on the amount of equity. Your primary residence is real property, and the trustee may sell any real property with excess equity to pay unsecured creditors. This leaves many Chapter 13 bankruptcy petitioners who face significant life changes hesitating to seek help about converting to Chapter 7 bankruptcy.
Consult with a Bankruptcy Attorney About Converting as Soon as Possible:
If you are struggling to make your Chapter 13 bankruptcy payments or you have experienced a significant life that will make it hard or impossible to continue making the payments you agreed to in your Chapter 13 bankruptcy, contact an experienced Tennessee or Georgia bankruptcy attorney as soon as you can. Your Chapter 13 bankruptcy hinges entirely on your ability to make on-time monthly payments for the full three or five-year plan. Don’t wait until you have missed a payment. Contact a bankruptcy attorney for help immediately.
But Is Your House in Danger if You Convert to Chapter 7 Bankruptcy?
The easy answer that’s not so easy to accept is: maybe. It all depends on the equity in your home. You may have filed Chapter 13 because you had far too much equity in your home to file Chapter 7 without losing your home. In this case, converting to Chapter 7 will mean losing the house. In some Chapter 13 conversion cases, the petitioner’s house’s equity is protected because the equity increased since they initially filed Chapter 13 bankruptcy. Regardless of how or why the equity is there, your Chapter 7 bankruptcy trustee has a job to do, and they will do it. But failing to make your Chapter 13 bankruptcy plan payments may have eerily similar results without the benefit of any discharge of debt.
If you are worried about converting your Chapter 13 bankruptcy to Chapter 7 bankruptcy, we can help. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Ken Rannick is a Senior Consumer Bankruptcy Law Specialist. Please get in touch. You are in good hands with Ken Rannick and Kenneth C. Rannick P.C.