Gurnee Bankruptcy Attorney On Converting From Chapter 7 To Chapter 1...

As a Gurnee bankruptcy attorney, I am often asked; can a Chapter 7 Bankruptcy case be converted to Chapter 13?  A Chapter 7 Bankruptcy case can be converted to Chapter 13 upon motion by the debtor before the court and provided the case has not previously been converted from Chapter 13 to  Chapter 7.  Any time you convert a case from Chapter 7 to Chapter 13, you have to show to the court why in this particular situation your case should be converted.  For example, when you file a Chapter 7 Bankruptcy case, you are basically advising the court that you do not have significant income to pay or reorganize your debts over a period of three to five years.  If all of the sudden you decide that you can convert or you wish to convert to Chapter 13, you must show by motion that you now have the ability to reorganize your debt.  Absent some type of showing of additional income, you might have a problem proving to the court that you have the ability to reorganize under Chapter 13.  

To complicate things even further, a lot of debtors try to convert from Chapter 7 to Chapter 13 once the Chapter 7 trustee is interested in administering a particular non-exempt asset.  I have seen cases where the court has allowed the conversion from  Chapter 7 to Chapter 13 with an immediate order to reconvert back to Chapter 7 based on arguments from the Chapter 7 trustee that the attempt to convert was merely to avoid the administration of an asset.  So technically you do have the right or the ability by motion to convert from a Chapter 7 to a Chapter 13, but it is not guaranteed to be successful.  Sometimes a Chapter 7 case has an excessive budget whereby the trustee or the U.S. trustee feels that there is an abuse on the system.  In those cases, the debtor is more likely to be granted the right to convert, because the U.S. trustee or the trustee is pushing for the case to be converted so that creditors can receive either all or a portion of the debt that is owed over the next three to five years under Chapter 13.