If you are seeking debt relief through a Chapter 13 bankruptcy there are some things that can come up that may hinder your ability to sustain your plan payments. Maybe you lost your job, or got divorced, or even suffered a medical condition impeding your ability to earn a living. When your ability to maintain your Chapter 13 payments is in jeopardy, contact your Dayton OH bankruptcy attorney right away to discuss converting your case to a Chapter 7.
By keeping in communication with your attorney and the court about any changes to your financial situation in Chapter 13 you could be eligible to convert your case to a Chapter 7, in which you would be granted a discharge with no further payments to the trust. However, there are some eligibility requirements in order to qualify for a case conversion.
First, you must be able to show that you are unable to make your payments through financial hardship. This is typically done by filing a means test for Chapter 7 eligibility, which calculates your disposable income against the median income level of the state. If you have lost a job, gotten a divorce, suffered a medical condition or have a disability preventing you from working, your income is likely to have lowered and may qualify under the means test.
Second, you must not have filed a prior Chapter 7 case and received a debt discharge in the last eight years. Bankruptcy laws require that debtors wait eight years between Chapter 7 bankruptcy filings. If you had received a discharge under a prior Chapter 13 case, you would only be required to wait six years. The timing of any filing or conversion is critical to the successful outcome of your case. Always discuss your options with your bankruptcy attorney before making a decision to convert.