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Converting Your Chapter 7 Bankruptcy to Chapter 13

Converting Chapter 7 to Chapter 13  in Raleigh, NC

Majority file for bankruptcy under Chapter 7 of the United States Bankruptcy Code and some prefer to switch from chapter 7 to chapter 13 bankruptcy due to the benefits. However, certain questions arise whenever this process is being undertaken, such as if you can switch from chapter 7 to chapter 13 and what factors should be considered. This is where you will need the expertise of a Raleigh, NC bankruptcy attorney.

To summarize, chapter 7 and chapter 13 have distinct differences. Chapter 7 is commonly filed by those whose income is less than the state median while chapter 13 involves those with regular, higher incomes enough for a five year repayment plan. In chapter 7, one can sell their nonexempt property while this process isn’t done in chapter 13. 

Bankruptcy Attorney in Raleigh, NC

There are several reasons one might wish to convert from chapter 7 to chapter 13, one being upon orders of the bankruptcy court. Other debtors realize that chapter 13 offers better benefits for debtors especially those who have failed to disclose assets and underestimated their assets’ value. Chapter 13 offers debtors a way to preserve their assets while still trying to get back on their feet. 

When filing for bankruptcy or converting chapter 7 bankruptcy to chapter 13, enlist the help of a Raleigh, NC bankruptcy attorney. An attorney can offer personalized solutions for your bankruptcy woes, taking into account your financial situation when crafting the best possible outcome for you. A bankruptcy attorney can also aid you in matters such as stopping repossession and foreclosure. Schedule a consultation with an attorney now.

Why do I need to convert Chapter 7 Bankruptcy to Chapter 13 in Raleigh, NC?

Converting Your Chapter 7 Bankruptcy to Chapter 13 So you wish to convert chapter 7 bankruptcy to chapter 13? While it is possible, one must take into consideration the factors that enable an individual to convert, such as the failure to disclose assets and the presence of a sudden change in a debtor’s financial situation. Dealing with bankruptcy conversion is complicated, which is why having a bankruptcy attorney is a big advantage. 

In this situation, a bankruptcy attorney’s job is to review your case and analyze your financial situation, to see if you qualify for converting chapter 7 bankruptcy into chapter 13. An attorney can help you see that converting to chapter 13 can help you reduce monthly payments whilst still maintaining a cash flow. 

An effective Raleigh, NC bankruptcy attorney should be able to help you convert your chapter 7 bankruptcy to chapter 13. Founded in 2003, the law firm provides an individualized approach to bankruptcy cases, with the attorney being a Board Certified Consumer Bankruptcy Specialist. The law firm’s attorneys are more than capable of delivering the best outcome possible for you to get a fresh start.

What are Chapter 7 and Chapter 13 Bankruptcy?

Before learning the process of converting your chapter 7 bankruptcy to chapter 13, one must first differentiate the two. Chapter 7 bankruptcy is defined as the quickest, cheapest form of bankruptcy since it takes about 120 days to process. Chapter 7 bankruptcy enables you to repair poor credit through prompt payments.

Chapter 13 bankruptcy or the wage earner’s bankruptcy has a different approach to it. The most notable feature of the chapter 13 bankruptcy is the five-year repayment plan wherein you must pay the creditors the amount of your assets in full or in part. 

What are the Reasons for Converting Your Chapter 7 Bankruptcy to Chapter 13?

The main reason most people prefer to file chapter 7 is due to the easier, quicker process, not to mention that it’s easier to qualify for it. Filing for chapter 7 eradicates qualifying debt without the need for a repayment plan. Nonetheless, some consider converting to chapter 13 voluntarily or by bankruptcy court order.

Court-Ordered Conversion

In a court-ordered conversion situation, a bankruptcy court will require you to convert to chapter 13 if it is proven that you aren’t eligible for chapter 7 bankruptcy, typically due to errors on the chapter 7 bankruptcy means test. The bankruptcy means test is done in order to assess whether an individual is capable of making monthly payments towards unsecured debts via a repayment plan. If you fail to qualify, the court will order you to convert to chapter 13. 

Voluntary Conversion

There are also personal reasons why an individual wishes to convert their chapter 7 bankruptcy to chapter 13. The reasons are: 

  • Underestimation of Property Worth-If you weren’t able to estimate your property’s worth, you could convert to chapter 13 bankruptcy, especially if the asset is worth more than you think. 
  • Failure to List a Valuable Asset- If you accidentally fail to list a valuable asset, you could convert to chapter 13 bankruptcy. While it isn’t mandatory, a choice has to be made between converting or losing the undisclosed asset in a chapter 7 bankruptcy. 
  • Discharging a Debt in Chapter 13 Bankruptcy– If you have debts that can only be wiped out with a chapter 13 bankruptcy, then this is the time to convert. 

What are the Steps in Converting Your Chapter 7 Bankruptcy to Chapter 13? 

Converting your chapter 7 bankruptcy to chapter 13 is fairly hassle-free in most courts, with the majority saying that you can convert even as your creditor says otherwise. 

When seeking to convert, be mindful of the following processes:

  • File a motion for the court’s permission
  • Send a motion to creditors, trustee, and other interested parties.
  • Attend a hearing

Should there be no objections to the motion, the bankruptcy court will grant the request without the need for a hearing. Courts require you to follow the local rules on the bankruptcy court’s website. In order to stay updated and stay in line with the law, consult a Raleigh, NC bankruptcy attorney. 

Call our Raleigh, NC Bankruptcy Attorney Now!

Bankruptcy is a complicated subject with plenty of procedures involved and while it might be deemed scary and desperate, it can actually be a fresh start for you. Chapter 7 and chapter 13 bankruptcies have their differences. Depending on the circumstances you’re in, you could be eligible for converting to chapter 13 especially when you have assets of value that aren’t listed that you could stand to lose in a chapter 7 bankruptcy. 

To familiarize yourself with the whole converting process, get in touch with a bankruptcy attorney from Cameron Law Firm who can offer sound legal advice, represent you in court, and ensure you get the best outcome possible. 

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