Monthly Archives: June 2016

How do I convert my chapter 13 case to a chapter 7 case (voluntary conversion)?

It’s really simple to convert the case, but the ramifications are incredibly complicated.  conversion

You convert the case by filing a simple one page documents called a “Notice of Voluntary Conversion to Chapter 7.”  Here is the Utah Bankruptcy Court link for the pro se document in .pdf.  Here is the generic text for the motion:

**********

NOTICE OF VOLUNTARY CONVERSION TO CHAPTER 7

Pursuant to s 1307 of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 1017(f)(3), Debtor hereby converts the above-captioned chapter 13 case to a case under chapter 7 of the Bankruptcy Code.

**********

That’s it.  (You do have to pay a $25 conversion fee, since the $310 filing fee you originally paid for the Chapter 13 doesn’t quite pay the full $335 filing fee for a Chapter 7).

Now as for what actually happens, well, it’s complicated.

If you have never filed bk before, then converting from a 13 to a 7 isn’t bad, but you will either have to catch up on your secured creditors (like car loans and mortgage payments) quickly, or the creditors will want to repossess their collateral.

If you have filed bk and received a discharge in a chapter 7 in the last 8 years, then your conversion will not help at all, since you cannot receive a chapter 7 discharge if the cases have been filed within 8 years of eachother.

As for the other effects, you’ll need to consult an attorney for a fairly in depth discussion of your bankruptcy particulars.

Can I file a new bankruptcy case while my old one is still open?

Also known as:

“Can I file a new bankruptcy case while my current case is pending, What happens if you have two open bankruptcy cases, and Can I file a chapter 13 case to stop a foreclosure while my chapter 7 case is still open?”  file a new case

No.  Or you could try, but you won’t find a bankruptcy attorney who will be willing to do it.

There is a 2005 bankruptcy case out of the 7th Circuit called In re Sidebottom, 430 F.3d 893 (7th Cir. 2005), which quotes an old Supreme Court case from 1925, Freshman v. Atkins, 269 U.S. 121 (1925).  The case points out that, first, there is a general per se prohibition against a debtor having more than one bankruptcy case open at any time.  (The only exception is if the second bankruptcy case deals with new debts that are not covered in the currently open case, but this is questionable and rare). Second, and even worse, the new case is most likely a bad faith bankruptcy filing, which could subject the attorney and the debtor to various sanctions from the bankruptcy court.

In other words, you can’t file a new case while your old case is still open, and you won’t be able to find an attorney to attempt it because of the per se rule and the very real bad faith filing implications.

I had a potential client meet with me at 8:30 in the evening because of a pending foreclosure sale the next morning.  As we were reviewing her options, she pointed out that her current chapter 7 case was still active.  I looked it up on PACER and found that not only was her chapter 7 still open, but that in that current case, the mortgage company had filed a Motion for Relief from Stay (“MFRS”), lifting bankruptcy protection from the home so that they could foreclose.

I advised her that I could not file a new case while the current case was open, and I warned her that attempting to do so would amount to filing the new case in bad faith.  I would not file a new case for her.

In the end, it worked out for her even though the foreclosure sale went through the next morning, because her liability on the mortgage obligation was already discharged in the chapter 7, and she didn’t want to save the home, she had just wanted to buy a couple more weeks to pack up and move out.