Debt problems are stressful. Finding a solution through an Ohio bankruptcy can bring the welcome relief. However, sometimes your case doesn’t go as planned. If you have debt or income changes you may find yourself converting from Chapter 13 bankruptcy to Chapter 7 bankruptcy. Or vice versa.
Converting From Chapter 13 Bankruptcy To Chapter 7 Bankruptcy
In your Chapter 13 bankruptcy, you would have been given a payment plan for resolving your debts. This plan would have spread out payments over three to five years. Missing a payment or losing income could prevent you from keeping up to your plan. If you are unable to make your payments as determined you may want to convert your case. Converting from Chapter 13 bankruptcy to Chapter 7 bankruptcy can help. After the conversion you can still eliminate your debts. In fact, your debts may be eliminated even quicker than before.
However, there are some drawbacks. Now in a Chapter 7 case, your assets may be at greater risk. Any non-exempt assets could be given to the trustee. This decision is up to the court. Similarly, any secured debt assets may be at risk. In most cases, these debts are not eligible for discharge in Chapter 7. This means you would still be liable for the debts.
Converting From Chapter 7 Bankruptcy To Chapter 13 Bankruptcy
In your Chapter 7 bankruptcy, you would have your debts eliminated by the sale of non-exempt assets. This provides for quick debt relief. Often a matter of six months or less. Your Chapter 7 case could be jeopardized by a few situations. First, not everyone qualifies for Chapter 7. You may have initially been eligible, but the court rule ineligible later after looking deeper into your details. Also, if you gain additional income after filing your case, you may be asked to covert your case.
Although you may not get quick debt relief, there are benefits to Chapter 13. You can include a wider range of debts in a Chapter 13. These include secured debts like mortgage or car loans. You can also protect your assets by keeping even your non-exempt items safe. Talk to your Ohio bankruptcy lawyer about which chapter best suits your debt relief needs.