Converting Between Bankruptcy Chapters in New York

Circumstances change. If you filed under the wrong chapter or your situation has shifted, you may be able to convert your case. Here is how conversion works in the Southern District of New York.

This page provides general educational information, not legal advice. Consult a qualified attorney for advice about your specific situation.

Yes. A debtor has an absolute right to convert from Chapter 13 to Chapter 7 under 11 U.S.C. section 1307(a), as long as the case was not previously converted from Chapter 7. You must still qualify for Chapter 7 under the means test. The conversion fee is $25.

Conversion Options

Chapter 13 to Chapter 7

  • Absolute right under 11 U.S.C. section 1307(a) if case was not previously converted from Chapter 7
  • Conversion fee: $25
  • Must still pass the means test
  • Common when plan payments become unaffordable
  • Undistributed trustee funds are returned to you

Chapter 7 to Chapter 13

  • One-time right under 11 U.S.C. section 706(a) if case was not previously converted
  • Conversion fee: $25
  • Must have regular income and debts within Chapter 13 limits
  • Common when you need to save a home or vehicle
  • Must file a repayment plan within 15 days

Common Reasons to Convert

Chapter 13 to Chapter 7

  • Income dropped (job loss, reduction in hours, medical leave)
  • Plan payments are no longer affordable
  • You no longer need to protect a home or vehicle through the plan
  • The case is headed for dismissal and Chapter 7 is a better outcome

Chapter 7 to Chapter 13

  • You are about to lose a home or vehicle to liquidation
  • You need the automatic stay to last longer than 3-4 months
  • You have non-exempt assets the trustee would sell in Chapter 7
  • You want to catch up on mortgage or car payments through a plan

The Conversion Process in S.D.N.Y.

  1. File a motion to convert with the bankruptcy court (or a notice of conversion if it is your absolute right)
  2. Pay the $25 conversion fee
  3. File amended schedules if your financial situation has changed since the original filing
  4. New 341 meeting will be scheduled - the trustee may change
  5. If converting to Chapter 13, file a repayment plan within 15 days
  6. If converting to Chapter 7, the new means test is applied based on your current income

Important Limitations

  • One conversion per case. If you converted from Chapter 7 to Chapter 13, you cannot convert back to Chapter 7 as a matter of right - the court would need to approve it for cause.
  • Means test still applies. Converting to Chapter 7 requires passing the means test. New York's median income for a 1-person household is $66,973.
  • Creditor objections. In some conversions, creditors or the U.S. Trustee may object, particularly if there are allegations of bad faith.
  • Property acquired post-filing. Property acquired between the original filing and conversion becomes part of the estate and may be subject to liquidation in Chapter 7.

Frequently Asked Questions

Can I convert my Chapter 13 to Chapter 7?

Yes. A debtor has an absolute right to convert from Chapter 13 to Chapter 7 under 11 U.S.C. section 1307(a), as long as the case was not previously converted from Chapter 7. You must still qualify under the means test. The conversion fee is $25.

Can I convert my Chapter 7 to Chapter 13?

Yes. Under 11 U.S.C. section 706(a), a debtor may convert a Chapter 7 case to Chapter 13 at any time, as long as the case has not been previously converted. You must have regular income and debts within the Chapter 13 limits.

Why would I convert from Chapter 13 to Chapter 7?

Common reasons include: your income dropped and you can no longer afford plan payments, you lost your job, your non-exempt assets are minimal and Chapter 7 would be faster, or your Chapter 13 plan is failing.

What happens to my payments if I convert from 13 to 7?

Payments you already made to the Chapter 13 trustee are generally returned to you minus any amounts already distributed to creditors and trustee fees. Secured creditor payments that were already forwarded cannot be recovered.

Not Sure Which Chapter Is Right?

Compare the key differences and check your eligibility.

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