How To Convert Chapter 13 Bankruptcy to Chapter 7 in 2025

Struggling to keep up with your Chapter 13 repayment plan? You have options. Converting to Chapter 7 can give you faster debt relief without years of monthly payments.

The process is straightforward. You file a Notice of Conversion, pay a $25 fee, and attend a new creditor meeting. Your discharge typically happens about 60 days later.

But converting isn’t always the right move. You could lose property, and Chapter 7 stays on your credit report longer. Understanding what happens after the switch helps you make the best decision.

Can You Convert Chapter 13 Bankruptcy to Chapter 7?

Yes, you can convert Chapter 13 to Chapter 7. The Bankruptcy Code allows you to switch at any time. You don’t have to complete your repayment plan first.

You must meet Chapter 7 eligibility requirements. Most importantly, you need to pass the means test. The means test compares your income to your state’s median income.

Common Reasons People Convert from Chapter 13 to Chapter 7

Financial changes drive most conversions. Job loss, mounting medical bills, or falling behind on mortgage payments are common triggers.

If you can’t afford your Chapter 13 plan payments anymore, Chapter 7 offers relief. You get debt discharge without the long repayment plan.

Converting isn’t automatic. You must qualify for a Chapter 7 discharge. You also need to meet specific timing requirements.

Who Qualifies for a Chapter 13 to Chapter 7 Conversion?

Federal bankruptcy law limits how often you can receive a discharge. Your eligibility depends on when you last filed bankruptcy.

To qualify for a Chapter 7 discharge after converting:

• You must meet Chapter 7 discharge rules and show insufficient disposable income
• You can’t have received a Chapter 7 discharge in the last eight years
• You may need court approval if you’ve converted before

Pros and Cons of Converting From Chapter 13 to Chapter 7

Converting can be smart in some situations. But it’s not right for everyone. Weighing benefits against drawbacks helps you decide.

Pros of Converting to Chapter 7

Converting offers several key advantages when you’re struggling with Chapter 13 payments.

✅ You get debt relief faster.

Chapter 7 takes about 3-4 months to complete. You’ll get a fresh start instead of waiting 3-5 years.

✅ You won’t make monthly debt payments.

Chapter 13 requires regular payments toward your repayment plan. Switching to Chapter 7 eliminates that obligation.

✅ You can still get most debt discharged.

Credit card balances, medical bills, and personal loans get wiped out. Most unsecured debts disappear completely.

✅ The general bankruptcy timeline stays the same.

Converting doesn’t reset your filing date. Your debts and assets relate back to your original Chapter 13 filing.

Cons of Converting to Chapter 7

Chapter 7 provides quicker debt relief but comes with potential downsides.

❌ You might lose your car or home.

Chapter 7 doesn’t let you catch up on missed mortgage or car payments. You may have to surrender property that isn’t protected by exemptions.

❌ Chapter 7 stays on your credit report longer.

Chapter 7 bankruptcy stays on your credit report for 10 years. Chapter 13 only stays for 7 years.

❌ You can’t get a “super discharge” for certain debts.

Chapter 13 offers broader debt discharge than Chapter 7. Some tax obligations or divorce-related debts won’t be dischargeable.

❌ You’ll have a new trustee and new paperwork.

A new Chapter 7 trustee takes over your case. You’ll submit updated financial documents and attend another creditor meeting.

How To Convert Chapter 13 to Chapter 7 Bankruptcy

The Bankruptcy Code allows you to convert at any time. The process is straightforward and usually doesn’t require a hearing.

Here’s the typical conversion process:

1. File a Notice of Conversion
2. Pay the conversion fee
3. Submit required bankruptcy forms and updates
4. Attend a new 341 meeting of creditors
5. Wait for case review and discharge

If you have a bankruptcy attorney, they can handle the conversion process.

File a Notice of Conversion

You or your attorney must file a Notice of Conversion with the bankruptcy court. Some courts require a motion instead. Check with your local bankruptcy court first.

Pay the Conversion Fee

You’ll pay a $25 conversion fee when filing your notice. The fee covers the difference between Chapter 7 ($338) and Chapter 13 ($313) filing fees.

Submit Required Forms and Updates

You typically won’t refile your entire bankruptcy petition. But you may need to update certain forms:

• Statement of Intention: Tells the court what you’ll do with secured property (keep, surrender, or reaffirm)
• Schedules I & J (Income and Expenses): Update if your financial situation changed
• Schedules D, E, and/or F (Debts): Amend if you forgot to list a creditor or have qualifying post-petition debt
• Current Statement of Monthly Income: Some courts require an updated means test upon conversion

Amending your creditor list may require a $32 amendment fee.

Attend a New 341 Meeting of Creditors

A new trustee gets assigned to your case. You’ll attend another 341 meeting of creditors even though you already attended one in Chapter 13.

The trustee reviews your case and asks basic financial questions. The meeting is routine and straightforward.

Wait for Case Review and Discharge

The trustee reviews your non-exempt property after conversion. The trustee determines if anything can be sold to pay creditors.

Creditors get a chance to object to your discharge. The court typically issues discharge about 60 days after the objection deadline.

What Happens to Your Property When Converting to Chapter 7?

All property you owned when you originally filed stays in your bankruptcy estate. But you won’t necessarily lose everything.

Bankruptcy exemptions protect many assets. Exempt property stays protected from creditors and the trustee. You get to keep it.

If you own non-exempt property, the Chapter 7 trustee may sell it. The trustee uses proceeds to repay unsecured creditors.

Whether this happens depends on your state’s exemption laws. What assets you had when you filed Chapter 13 also matters.

Can You Keep Your Property If You Convert?

In many cases, you keep your property after converting. Whether you do depends on bankruptcy exemptions.

Your original Chapter 13 filing date stays the same. Your bankruptcy estate doesn’t change when you switch to Chapter 7.

Here’s what happens:

• Exemptions you claimed in Chapter 13 still apply in Chapter 7
• If you didn’t have non-exempt property in Chapter 13, you likely won’t in Chapter 7
• If you had non-exempt assets, the Chapter 7 trustee may sell them

🔹 Property you acquired after filing Chapter 13 is usually safe.

As long as you didn’t convert in bad faith, the trustee generally can’t take post-filing property. The trustee can’t seize assets you obtained after your original filing date.

How Conversion Affects Your Mortgage and Car Loan

Loans backed by collateral require special handling. You need to decide what to do with secured debt.

Your options include:

• Redeeming the property: Pay the lender a lump sum equal to current market value
• Surrendering the property: Return it to the lender and discharge the remaining debt
• Reaffirming the loan: Continue making payments under original terms (or negotiate new terms)

Reaffirming a car loan can be tricky in a converted case. If your Chapter 13 trustee wasn’t making timely payments, your loan could be behind. You may face repossession if the lender lifts the automatic stay.

What Happens to Debts Incurred After Filing Chapter 13?

Life continues after filing bankruptcy. If you incur new debt like medical bills after filing Chapter 13, there’s good news.

The court usually treats this debt as if it existed before filing. The debt can be discharged when your Chapter 7 case closes. You usually don’t have to dismiss your case and refile.

Not all new debts are automatically included. If you need a big loan like car financing while in Chapter 13, you need court approval first.

The court verifies you can still afford Chapter 13 plan payments. You must handle new financial obligations responsibly.

Converting Your Bankruptcy: What You Need to Know

Converting from Chapter 13 to Chapter 7 raises questions about costs, timelines, and property. Here are answers to common concerns.

When Will You Get Your Discharge After Converting?

You’ll typically receive your Chapter 7 discharge 60 days after the creditor objection deadline. The entire Chapter 7 process takes about 3-4 months after conversion.

Your case stays open until the trustee finishes required tasks. But you get debt relief much faster than completing a 3-5 year Chapter 13 plan.

How Much Does It Cost To Convert?

The conversion fee is $25. This covers the difference between Chapter 7 and Chapter 13 filing fees.

You may pay an additional $32 amendment fee if you need to update your creditor list. Attorney fees vary if you hire legal representation.

How Long Does Conversion Take?

The conversion process itself is quick. Once you file the Notice of Conversion and pay the fee, conversion happens immediately.

You’ll attend a new 341 meeting within a few weeks. Your discharge typically follows about 60 days later, assuming no creditor objects.

Can You Keep Your Car When Converting?

You can keep your car if it’s protected by exemptions. You can also keep it by continuing payments through reaffirmation or redemption.

If your car has non-exempt equity, the trustee may sell it. If you’re behind on payments, you risk repossession unless you catch up quickly.

Consider whether you can afford to keep the vehicle. Reaffirming means you remain legally obligated even after bankruptcy.

Do You Attend Another 341 Meeting After Converting?

Yes, you must attend a new 341 meeting. A new Chapter 7 trustee gets assigned to your case.

The meeting covers basic financial questions. You’ll review your assets, debts, and current financial situation. The meeting is routine and usually brief.

Get Help With Your Bankruptcy Conversion

Converting from Chapter 13 to Chapter 7 can provide faster debt relief. But the decision impacts your property, secured debts, and future financial options.

You need to understand whether conversion makes sense for your situation. Timing, eligibility requirements, and exemption laws all affect the outcome.

A qualified bankruptcy attorney can evaluate your case and guide you through conversion. You’ll get personalized advice based on your specific circumstances and state laws.

Speak with a bankruptcy attorney for free to discuss whether converting your Chapter 13 to Chapter 7 is right for you.