When a debtor switches his or her case between different chapters of the bankruptcy code, we lawyers say they are “converting” the case from one chapter to another. This is usually done by having the debtor’s bankruptcy attorney file a simple motion with the judge.
Why would a debtor who had gone to the trouble of filing a chapter 13 case want to suddenly switch over to chapter 7? While there are many theoretical reasons, here are three that are fairly common in actual practice:
1. The debtor’s financial situation has changed considerably. Losing a job or even a cutback in hours may make it impossible to pay the trustee a monthly fee as proposed in your plan. Converting to a chapter 7 case may be a simple and logical decision here.
2. Illness or injury has given you a medical debt you can’t pay. Unless you have very good insurance, you can easily by swamped by medicals bills that were not anticipated when you filed the original chapter 13 case.
3. You household size has changed. If it has grown, you may have additional expenses that make Chapter 13 payments a struggle. You also may now qualify under the chapter 7 means test, because you income is no longer above the state average when the extra family member(s) are taken in to account.
Your lawyer is still your lawyer even though the case has been filed. Get on the phone and call him, and you may be able to put your heads together and improve the relief you get from the case with a chapter switch.