Q: Can I convert a Chapter 13 to a Chapter 7 before the meeting of the creditors? I can’t make my first payment.
My attorney’s paralegal told me that I do not qualify for Chapter 7, but I’m in dire financial straits. Worse than when I filed, and need to do the conversion. She told me that the Trustee will more than likely dismiss the case.
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A: A debtor may convert a chapter 13 case to a chapter 7 liquidation case, at any time. The right to convert to chapter 7 is unqualified and may not be waived. However, a case cannot be converted to a chapter for which a debtor is ineligible. Therefore, a debtor converting from chapter 13 to chapter 7 by right may still be subject to the means-test formula if his or her current monthly income at the time of filing the chapter 13 exceeded he applicable state median income. For a debtor that legitimately is unable to carry out a confirmable chapter 13 plan, this hurdle should not be insurmountable. If after applying the means test a presumption of abuse arises, the debtor may rebut the presumption by showing special circumstances. Once a debtor files a notice of conversion, the conversion is automatic and immediate; it cannot be delayed by the court.
Barbara Billiot Stage agrees with this answer
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