Tuesday, December 4, 2012

Can an Oregon Chapter 13 be switched over to a Chapter 7?

At times when debtors are in Chapter 13 making payments something happens that makes it difficult to maintain their Chapter 13 payments.  If a debtor suffers a loss of income while in an Oregon Chapter 13, or looses their job entirely it may not be enough to just lower their Chapter 13 payments.

Many times the case can be switched from a Chapter 13 to a Chapter 7 to relieve the debtor of the Chapter 13 payments.  In bankruptcy language this is referred to as "converting".  One benefit to converting a Chapter 13 to a Chapter 7 instead of dismissing and refiling a new case is the cost of the filing fee. A Chapter 7 filing fee is currently $299.  The filing fee to convert a Chapter 13 in Oregon to a Chapter 7 is $25.

Typically new schedules and information must be filed in the converted chapter 7 case, so your attorney may charge you legal fees to do the conversion.  But, by converting to Chapter 7 you will relieve yourself of the ongoing monthly payments in your chapter 13.

Not everyone can convert their Chapter 13 to a Chapter 7.  For example, if you have enough income to continue to pay your creditors in Chapter 13, you may be prevented from going to a Chapter 7.  Also, if you are in Chapter 13 because you have had a Chapter 7 filed in the 8 years before the original chapter 13 was filed, you can not convert to a Chapter 7.  

There are other reasons a Debtor in an Oregon Chapter 13 may not want to convert. If you are in Chapter 13, and you are having a tough time making the payments you may want to talk to your bankruptcy attorney about converting to a Chapter 7.

For more Oregon chapter 7 and Oregon Chapter 13 bankruptcy information please visit www.pacificbankruptcy.com.