Converting from Chapter 7 to Chapter 13

[BrokeinCA]

I have a few questions on the process when converting from 7 to 13. Has anyone here been through that? I did a search but can't find answers to the questions I am searching for.

1. Do they use updated income or income as of the date I originally filed for chapter 7
2. Do I have to gather all the paperwork again
3. It is another 60 days from the new 341 hearing date
4. If my circumstances change down the road, am I eligible to convert to chapter 7 or do I have to wait another 8 years?
5. Does this chapter 7 filing stay on my credit report for 10 years if I convert to chapter 13
6. If I have to file chapter 13, can I stop paying car and house to do some home repairs I've been putting off

I'm sure I'll have more questions, but these are weighing on my mind right now.

[justbroke]

This is what I know...

1. Do they use updated income or income as of the date I originally filed for chapter 7

Not necessarily. A Chapter 13 is forward-looking so the Chapter 13 Trustee will want to see current paystubs and for your plan to be commensurate with your forward-looking view.

2. Do I have to gather all the paperwork again

No. In a converted case, everything is considered filed. You may, however, need to do a new Means Test and/or Schedule I/J depending on any changes in circumstances (income, property) or just required by local rules.

3. It is another 60 days from the new 341 hearing date

Yes! You will get a new 341 date and creditors will be allowed to file claims. They will also receive a last day to file a motion to deny discharge. This is because most Chapter 7s are no-asset and the creditors would not have needed to file a claim.

4. If my circumstances change down the road, am I eligible to convert to chapter 7 or do I have to wait another 8 years?

You could motion for a hardship discharge or convert back to Chapter 7. However, a conversion back to Chapter 7 has to be done by motion and there will be a hearing. (Normally, a conversion from Chapter 13 to Chapter 7 is done simply by filing a notice, with no motion or hearing required. However, a previously converted Chapter 13 cannot be converted just on notice.)

5. Does this chapter 7 filing stay on my credit report for 10 years if I convert to chapter 13

Yes. The Chapter 13 will have the same case number as the Chapter 7, so as soon as it hits the credit bureaus, it will show as a Chapter 13 and be subject to the 7 year reporting period.

6. If I have to file chapter 13, can I stop paying car and house to do some home repairs I've been putting off

You mean convert to Chapter 13, right? Technically you could do that and file new schedules to show the issue. If you're talking about dismissing the Chapter 7 then converting... that could be problematic.

I'm sure I'll have more questions, but these are weighing on my mind right now.

Okay.

[BrokeinCA]

Thanks again Justbroke! You are always so helpful. And yes, I meant converting to Chapter 13 vs. dismissing and filing 13.

Just a couple of clarifying questions regarding the time that the bankruptcy filing will show on my credit report. I understand that a chapter 7 will show for 10 years. If I convert to Chapter 13 and my credit reports change to show chapter 13 instead of chapter 7 will it still report for 10 years or will it now only report for 7 years? Also, will there be a new start date for my chapter 13 or is it effective as of the day I filed chapter 7 with regards to credit bureau reporting?

[justbroke]

If you convert from a. Chapter 7 to a Chapter 13, the filing date is what is controlling. It will be the date that you filed the Chapter 7, but that record would be updated to be a Chapter 13 (Wage Earner Plan). Once that record is update, and you receive a discharge under Chapter 13, then it will be deleted from your credit report after 7 years, and again, from the original filing date.

Bottom line: A conversion does not change the filing date. It will be as if you filed a Chapter 13 on the day you filed the Chapter 7.

[May2014]

We converted from 7 to 13 and we weren’t required to do anything. The lawyer does what he/she does and away you go!

As for your credit report...most everything changed correctly to the 13 but our report also shows a discharged chapter 7 in one spot that we have disputed a number of times and can’t get corrected. But we got a mortgage loan and two small credit cards immediately following discharge, so it’s been a non-issue.

[BrokeinCA]

Thanks so much JustBroke and May2014!