If you are in a Chapter 13 bankruptcy and you experience any reduction in your income, you may be able to file Chapter 7 bankruptcy under certain circumstances depending on your qualifications. There is a means test that can be taken to determine eligibility. The procedure for converting chapters may vary depending on what jurisdiction the filing will occur in.
If your income changes while in a Chapter 13 due to reduction of hours or you lose your job, contact your bankruptcy attorney or Trustee to let them know of your situation. You may be required to conduct a means test which determines eligibility by reviewing your income. The test gives an idea of what disposable income you have left after taking care of pertinent expenses.
You may also qualify for converting your bankruptcy if your expenses have changed. If you qualify to file Chapter 7 you’ll have to convert your case by filing a notice of conversion with the bankruptcy court . This is also known as filing a motion to convert your Chapter 13 case to Chapter 7. It’s common for debtors to experience changes in their financial situation and converting your case may allow you to get qualifying debts discharged.
Most cases that are converted are not challenged by the court when sufficient information is presented showing the need for the change. Discuss any changes to your income with your bankruptcy attorney .