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Convert, Don’t Dismiss, That Bankruptcy Case

By Cathy Moran, Esq. Filed Under: Bankruptcy Practice

Young lawyers just learning bankruptcy practice seem to have missed the portions of the Bankruptcy Code that allow a debtor to convert a case under one chapter of the Code to a case under a different chapter. 

All too often, when it looks like the client is in the wrong chapter, they propose to dismiss and refile under the new chapter.

Not necessary.  The Code provides, in sections 706, 1112, and 1307, that a case can be converted, retaining the same date for the order for relief. 

No new filing fee is required, though the debtor will have to pay any excess between the fee paid to initiate the case and the fee for the chapter the case is converted to.

This is even more important in the days after bankruptcy “reform” , when the duration of the automatic stay is limited in a second case to 30 days.

More

Before you convert a Chapter 13 case

Gotcha’s in the converted case

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Filed Under: Bankruptcy Practice Tagged With: attorney, consumer bankruptcy law, convert, lawyer, skills

Comments

  1. Angie says

    January 30, 2010 at 3:13 pm

    i understand that converting from ch. 13 to ch. 7 is much easier than the other way around. why is that?

  2. Cathy Moran says

    January 30, 2010 at 5:11 pm

    The short answer is a Supreme Court case of a couple of years ago called Marama, which found that there was no absolute right to convert to 13. Marama was a bad actor and the court made a broad rule to get at this narrow slice of behavior. It’s rooted in tradition that 13 is a privilege (keeping your stuff and a slightly broader discharge).

  3. gegates says

    August 15, 2012 at 11:19 am

    Are you charging the client for the conversion from 13 to7? If so, how much?

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