If you file for Chapter 7 bankruptcy, you can later switch to Chapter 13 if you decide it would be better. For example, you might discover that a tax debt cannot be discharged in a Chapter 7 bankruptcy, but can be included in a Chapter 13 repayment plan.

You have the absolute right to convert a Chapter 7 bankruptcy case into a Chapter 13 bankruptcy case at any time, as long as you did not previously convert this case to Chapter 13 bankruptcy from Chapter 7 bankruptcy. You do have to file a written request (called a motion) with the bankruptcy court, send a copy of your motion to each of your creditors and obtain an order from the court.

The major issue that will come up at the court hearing on your request is whether or not you are eligible to file for Chapter 13 bankruptcy. Your debts must meet the $871,550 secured debt and $269,250 unsecured debt limits, and you must have sufficient disposable income to fund a Chapter 13 plan.

Courts are split as to whether your eligibility for Chapter 13 bankruptcy is based on your financial circumstances at the time you filed your Chapter 7 bankruptcy or at the time you seek to convert. For most people, it doesn't matter. But it may matter to you. For example, if you had no regular income when you filed for Chapter 7 bankruptcy, you may not be allowed to convert to Chapter 13 bankruptcy if your court bases eligibility on circumstances at the time you filed your Chapter 7 bankruptcy case. In that situation, the court would probably require you to dismiss your Chapter 7 case and refile a Chapter 13 case.

If the court does approve your motion to convert, you must file your Chapter 13 repayment plan within 15 days and start making payments under the plan within 30 days after you file it.

Resources for Motion Forms

To see what a motion to convert your case to Chapter 13 bankruptcy looks like, consult a bankruptcy forms book at a law library. Also, Consumer Bankruptcy Law and Practice, written and published by the National Center for Consumer Law, contains sample motion forms. Check your local law library for this book or visit www.consumerlaw.org to buy a copy.