Understanding Trademark Law Protections

Converting From A Chapter 7 Bankruptcy To A Chapter 13

After filing for Chapter 7 bankruptcy, you might be forced to convert to a Chapter 13 bankruptcy. In other cases, people will voluntarily decide to convert. While both of these forms of bankruptcy can help you get out of debt, there are times when one option is better than another. If you realize that Chapter 7 is not right for your situation, you may want to talk to your bankruptcy lawyer about converting to Chapter 13.

Why Would A Court Force You To Do This?

One of the only reasons bankruptcy courts force filers to convert is if the numbers do not add up. People that file for Chapter 7 must pass a means test, which is a test designed to ensure that a person qualifies for Chapter 7. If the calculations were not accurate, the court will find out, and this will make you ineligible for Chapter 7.

In this situation, the court would let your attorney know that the case must be converted to a Chapter 13 case.

Why Would You Decide To Do This?

There are also times when people do qualify for Chapter 7; however, they discover shortly after filing that this might not be the wisest decision to make. In a Chapter 7 case, you could lose some of the assets you have, whereas this is not usually the case in a Chapter 13 bankruptcy. Here are some common reasons to decide to convert:

  • You changed jobs – If you are now earning significantly more income, you could take advantage of a Chapter 13 bankruptcy. This is a better option if you want to avoid losing assets you own.
  • Forgot to claim an asset – When a bankruptcy trustee receives your case, he or she will thoroughly investigate your assets. If one is discovered that you did not report, the court may throw your bankruptcy out. Therefore, if you realize you forgot to list an asset, you might be better converting.
  • You discover that an asset can only be discharged through Chapter 13 – Some debts can only be discharged through a Chapter 13, and an example of this is court-ordered debt from a divorce settlement. If you want to get rid of this debt, it may only be possible through a Chapter 13.

If you discover for any reason that a Chapter 13 would be better for your situation, talk to your attorney about converting.

How Do You Convert?

The conversion process is usually fairly simple, and it may involve the following steps:

  1. Discuss the issue with your attorney to make sure he or she agrees with the decision. Make sure you fully understand the consequences this may create before you go through with it.
  2. File a court motion to ask for the bankruptcy to be converted. The court will review this and will set up a hearing for the matter.
  3. Send letters to everyone involved in the case, including every creditor you have. The creditors have a right to attend the hearing if they object to the conversion.
  4. Go to a court hearing to make sure that no one objects. As long as no one fights this change, you should not have any problems getting the court to agree to it.

Once you complete these four steps, the bankruptcy court will convert the bankruptcy for you as long as you qualify.

Filing for bankruptcy takes time and patience, and it is a big decision to make. When you make this decision, it's important for you to understand what is best for you. Having a good bankruptcy attorney is an important part of this process, and you can hire the one of your choice.

About Me

Understanding Trademark Law Protections

Welcome, I'm Darby Church. I'd like to share my journey from retail manager to business owner using this website. My attempts to start a business of my own were complicated by the actions of an unethical party. In short, I shared too much information about my products and they were stolen before I could get the business off the ground. Luckily, I had already filed a trademark for those items, which meant they were protected by the law. I still had to hire a lawyer to help me win the case. I took the complaint to court to end the run of products from my unlawful competitor, so I could start running my business. The process enlightened me about the ins and outs of trademark law. I hope my experience can help you avoid the same pitfalls or fight for your products with help from a lawyer. Thanks for visiting.