Can I Convert My Bankruptcy Case?
If you were to file for one type of bankruptcy, such as a liquidation bankruptcy, and then it turned out there was a reason to want to file for a reorganization bankruptcy instead, would you be able to convert your case? Or, vice versa, if you filed for a reorganization bankruptcy and then wanted to convert to a liquidation bankruptcy as a result of a change in your circumstances, would the bankruptcy court allow you to make a change? These questions often arise for both personal bankruptcy and business bankruptcy filers alike.
The process of changing your bankruptcy case from one chapter to another is called a “conversion,” or converting a bankruptcy case according to the US Bankruptcy Code. In many situations, it is indeed possible to convert a bankruptcy case, but it is essential to speak with a lawyer about your options and the particular facts of your case. A West Palm Beach bankruptcy attorney at Kelley, Kaplan & Eller can tell you more.
Converting from Chapter 7 to Chapter 11 or 13
There is an “absolute right” to convert a Chapter 7 case to a Chapter 11 case under US bankruptcy law as long as the debtor is eligible, and as long as the case was not previously converted.
Converting from Chapter 7 to Chapter 13 is relatively easy as long as the case was not previously converted. To do so, you must file a motion with the court. If there are no objections, the case can typically be converted quickly.
Converting from Chapter 11 or 13 to Chapter 7
Chapter 11 debtors have a “one-time absolute right to convert” their Chapter 11 case to a Chapter 7 case, according to the US Courts, unless one of the following is true: “the debtor is not a debtor in possession,” the Chapter 11 case was involuntary, or the case was already converted to a Chapter 11 case at a creditor’s request.
To convert from Chapter 13 to Chapter 7, the debtor can petition the court if they are eligible for Chapter 7 bankruptcy (typically requires passing the “means test”). Common reasons to convert from Chapter 13 to Chapter 7 include a change in the debtor’s financial circumstances (i.e., the debtor cannot make their payments), or the debtor no longer wants to use Chapter 13 bankruptcy to keep a home or another piece of property associated with secured debt.
These are general guidelines, but you should be sure to discuss your specific circumstances, and any exceptions, with a bankruptcy lawyer.
Contact Our West Palm Beach Bankruptcy Lawyers
Are you currently in the midst of a bankruptcy case and hoping to convert your case to a different chapter? Or are you hoping to learn more about the possibility of converting from one type of bankruptcy to another before you move forward with a bankruptcy filing? You should contact one of the experienced West Palm Beach bankruptcy attorneys at Kelley, Kaplan & Eller to learn more about conversions and dismissals of bankruptcy cases, and to find out more about options available to you based on your particular circumstances. We can speak with you today about your bankruptcy case and financial situation.
Sources:
law.cornell.edu/uscode/text/11/706
law.cornell.edu/uscode/text/11/1112
law.cornell.edu/uscode/text/11/1307
uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-11-bankruptcy-basics#:~:text=A%20debtor%20in%20a%20case,case%20under%20chapter%2011%20other
