San Jose Bankruptcy Attorney Talks About Changing Chapters
San Jose Bankruptcy Attorney Talks About Changing Chapters
Previously we discussed the many Chapters for bankruptcy. While most individuals go through Chapter 7 which is a discharge of debts or a Chapter 13 which is meant to be a repayment plan, the debtors are allowed to move between chapters. While changing chapters is not as easy as flipping pages of a book, it is not as hard as writing a book either.
A chapter 13 can request to become a chapter 7 bankruptcy. It is the simplest of conversions and can be granted without a court hearing. This is important because once a debtor realizes that they must convert, the chapter 7 can move very quickly. A conversion to chapter 7 from a chapter 13 can be for many reasons. The most common is that the debtors can not make the plan payments. Specifically, the debtor probably lost their job or the mortgage has readjusted to an amount over the debtor’s income. When that happens the courts full understand that the debtor now qualifies for a chapter 7 and will just give it. Of course the debtor may lose non-exempt property, such as their homes, in the process.
Moving from a chapter 7 to a chapter 13 bankruptcy is much trickier. It also requires more work by the debtor. Specifically, the debtor, through their attorney, must now calculate a plan payment that covers all priority claims. This is task is beyond some attorneys who only dabble in bankruptcy or only focus on chapter 7 bankruptcies. The change of chapters also require a noticed motion which may entail a court hearing. Therefore a debtor should be sure that they want to convert before asking for such.
If you are thinking about converting to a chapter 7 or chapter 13, please give Sagaria Law a call at 1-800-941-6730 to set up a consultation or visit us at www.sagarialaw.com.
