Consumer Bankruptcy:

Switching From Chapter 13 to Chapter 7

It is possible to change from a Chapter 13 bankruptcy case to a Chapter 7 bankruptcy case at any time and for any reason. This is most commonly done because the debtor cannot meet the requirements of the repayment plan, due to some change in circumstances (loss of a job, for example). There are options when a debtor fails to make a payment other than changing from a Chapter 13 to Chapter 7, and they can be found in our discussion of Chapter 13. Changing from Chapter 13 to Chapter 7 will result in a loss of property, due to the differences in the nature of the types of bankruptcy. It should be noted that if the debtor received a discharge in a Chapter 7 case, within six years of filing for Chapter 13, he or she cannot receive a discharge for the case that is being changed. Consequently, it would not make sense to change the case. Also, any property that is owned when the debtor changes from Chapter 13 to Chapter 7 becomes the property of the court, unless it is exempt property, and the bankruptcy trustee will be able to liquidate the property in order to repay creditors.