We frequently have to convert Chapter 13 cases to Chapter 7. Usually, it’s because the client in a Chapter 13 case has lost his job and doesn’t have the same income he once had. You must be careful however to determine whether you are eligible for Chapter 7 relief. For example, if you filed a Chapter 7 case and got a discharge order within 8 years of the Chapter 13 filing, then no, you are not eligible.
Additionally, you must be sure that you can exempt all of your property if you convert to Chapter 7.
But once you’ve checked into those issues, then a Chapter 13 conversion to Chapter 7 occurs quickly. Your wage attachment payroll deduction is stopped. The Court usually converts the case within 4 to 8 weeks and then a Chapter 7 Meeting is scheduled before your new Chapter 7 Trustee, just like any other Chapter 7 case. Finally, you will decide whether you intend to keep your secured property such as a house or a car with a loan on it. When the case is converted to Chapter 7, then you decide quickly and begin making direct payments to the creditor.