New York Chapter 7 Lawyers

New York Chapter 7 Lawyers

New York Chapter 7 Lawyers

Posted on: December 19, 2011 - 3:32 pm
by Admin

Individuals rarely ask courts to convert Chapter 7 to Chapter 13. Nevertheless, this type of case conversion may be beneficial. In all situations, debtors should carefully compare the benefits changing chapters to the additional time required to receive a partial discharge, increased legal fees, and future plan payment obligations. Court approval is required. All future plan payments must remain current to avoid dismissal.

Reasons Why People Convert Chapter 7 to Chapter 13

Occasionally, changing bankruptcy chapters produces better results. The most frequently requested change is to terminate a repayment plan and seek an immediate discharge of all debts. Less frequently, debtors may request permission to convert Chapter 7 to Chapter 13. Several situations may justify these requests.

Qualification for a general discharge depends on the results of the means test. This test determines the amount of monthly income that is available for distribution to creditors. Debtors or their attorneys initially calculate the test when deciding upon a plan of action. Creditors, a trustee or the court may later object and request case dismissal when alleging an error in the test calculation. If an objection is valid, a debtor may request to convert Chapter 7 to Chapter 13 bankruptcy to avoid dismissal.