A conversion is when you convert (or flip) your case from one bankruptcy chapter to another. They are common with chapter 13 to chapter 7 cases, but can also go the other way from a chapter 7 to a chapter 13. This blog will explore what may trigger a conversion during a bankruptcy.
If you are in a chapter 13 case due to income or assets and something happens during your case, you may need to convert to a chapter 7. For example, if your income was high when you filed, but you had another child since filing and now you cannot afford a chapter 13, you may convert your case. As another example, if income was high at the time of filing, but you were demoted at work and cannot afford a chapter 13, you may then qualify for a chapter 7 instead. A chapter 13 commits your disposable income, therefore your attorney will pay close attention to the timing of converting, if you can, and disposable income.
Most commonly a chapter 7 case will be converted to a chapter 13 due to income. For example, if you are over the median income in the chapter 7 and try to squeeze through with the long form means test, the US Trustee may audit the case and determine you need to be a chapter 13 instead. If this happens your case would be converted.
If a conversion becomes necessary in your case, your attorney will walk you through the step thoroughly. As a note conversions can be both voluntary and involuntary.
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