How to Reopen and Convert a Dismissed Chapter 13 Bankruptcy to Chapter 7?

Question from sophia, How to Reopen and Convert a Dismissed Chapter 13 Bankruptcy to Chapter 7?

Answer from AI:

If your Chapter 13 bankruptcy case was dismissed and you want to reopen it and convert it to a Chapter 7 bankruptcy, there are specific steps you need to follow. Here’s a general guide to help you understand the process:

Understanding the Basics

Chapter 13 bankruptcy allows individuals with regular income to develop a plan to repay all or part of their debts. If your case was dismissed, it means the court ended your bankruptcy case without discharging your debts. Converting to Chapter 7, which involves liquidating non-exempt assets to pay creditors, might be a viable option if you meet certain criteria.

Steps to Reopen and Convert Your Case

1. File a Motion to Reopen: You need to file a motion with the bankruptcy court to reopen your dismissed Chapter 13 case. This motion should explain why the case was dismissed and why it should be reopened. You may need to pay a filing fee.
2. Attend a Hearing: The court may schedule a hearing to consider your motion. Be prepared to explain your reasons for wanting to reopen the case and convert it to Chapter 7.
3. File a Motion to Convert: Once your case is reopened, you need to file a motion to convert your Chapter 13 case to Chapter 7. This motion should comply with the requirements of the U.S. Bankruptcy Code, specifically 11 U.S.C. § 1307.
4. Meet Eligibility Requirements: Ensure you meet the eligibility requirements for Chapter 7 bankruptcy, including passing the means test, which assesses your income and expenses.
5. Submit Required Documents: You will need to submit various documents, such as updated financial statements, schedules, and a statement of intention regarding your secured debts.
6. Attend the 341 Meeting: You will be required to attend a meeting of creditors, also known as a 341 meeting, where the bankruptcy trustee and creditors can ask questions about your financial situation.

Legal Considerations

• Means Test: To qualify for Chapter 7, you must pass the means test, which compares your income to the median income for a household of your size in your state. If your income is below the median, you qualify. If it’s above, you may still qualify after deducting certain expenses.
• Automatic Stay: When you file for bankruptcy, an automatic stay goes into effect, stopping most collection actions against you. However, if your previous case was dismissed within the last year, the automatic stay may be limited to 30 days unless you can show good cause to extend it.
• Exemptions: Chapter 7 allows you to keep certain exempt property. Each state has its own list of exemptions, and you may also have the option to use federal exemptions.

When to Seek Legal Advice

Given the complexity of bankruptcy law, it’s advisable to consult with a bankruptcy attorney to navigate the process. An attorney can help you:

• Determine if reopening and converting your case is the best option.
• Prepare and file the necessary motions and documents.
• Represent you at hearings and the 341 meeting.

Resources

For more detailed information, you can refer to the following resources:

• Chapter 7 Bankruptcy Basics – U.S. Courts
• Chapter 13 Bankruptcy Basics – U.S. Courts

Remember, this information is intended to provide a general understanding of the process. For personalized advice, it’s crucial to consult with a legal professional.