Bankruptcy conversion and dismissal Manual del abogado

Chapter 7 to 13

The debtor has a right to convert from Chapter 7 to 13 if the debtor is eligible to be in Chapter 13, but there is no 7 to 13 conversion unless the debtor requests it. The debtor must file a motion to convert the case.

Chapter 13 to 7  

The debtor may request to convert at any time. This is done by a notice of conversion. A creditor may also request a conversion from Chapter 13 to Chapter 7, but if the creditor requests conversion, there is no conversion unless it is approved by the court after notice and a hearing. The debtor generally has the right to dismiss a Chapter 13 case and may prefer to have the case dismissed instead of converted. If a case is converted from Chapter 13 to Chapter 7, debts incurred after the Chapter 13 case was filed and before conversion are eligible to be discharged if they are dischargeable in a Chapter 7 case. Conversion does not affect eligibility for discharge. If the debtor was not for a Chapter 7 discharge when the case was filed under Chapter 13, the debtor will not be eligible for a discharge after the case is converted, even if the conversion occurred more than 8 years after the prior Chapter 7 bankruptcy was filed. This is an example of a situation where dismissal would be preferable to conversion.

Dismissal

• Chapter 7: May only be dismissed "for cause" after notice and a hearing. Courts typically will not dismiss a Chapter 7 case if it will prejudice creditors, so debtors usually have to show how the creditors would nonetheless be paid after a Chapter 7 dismissal.
• Chapter 13: The debtor may obtain dismissal upon request, as long as the case started as a Chapter 13 case and has not been converted to another chapter.  Note that the bankruptcy court may place restrictions on a debtor filing a subsequent bankruptcy case.