I had a client come in today wondering what the chances are for her to convert her Chapter 13 to a Chapter 7 bankruptcy. She started into her 5 year Chapter 13 plan about a year ago and she is going to retire soon and won’t have the same income as she did before.
Section 1307(a) of the Bankruptcy Code gives Chapter 13 debtors what seems like an absolute right to convert to a Chapter 7 (if you qualify for a chapter 7). Rule 1017(f)(3) of the Federal Rules of Bankruptcy Proceedure tells you how it is done. It is done by filing a notice of conversion and can be done without a court order if done pursuant to Section 1307(a).
So I told my client, if it starts to hurt, we’ll convert.