Q: Can I convert my chapter 13 bankruptcy to a chapter 7 bankruptcy? I live in Arizona.
Last year (in 2022), I filed a chapter 13 bankruptcy. At the time I filed, I did not qualify for a chapter 7 bankruptcy because the equity in my car was too high.
After I filed my chapter 13 bankruptcy, in November of 2022, the majority of voters voted yes on Arizona proposition 209 which greatly increases the amount of equity allowed on a vehicle for a chapter 7 bankruptcy. I believe I would qualify for a chapter 7 bankruptcy under the new law.
Are the new laws that are taking effect from Proposition 209 in effect for Arizona now, and if so, would I be able to convert my Chapter 13 to a chapter 7 bankruptcy? What additional steps would I need to take and would there be a fee?
A:
Mr. Denison's answer is not correct for Arizona, but it might be for his state. This is a much more complicated question than you realize. Prop 209 is being challenged. Plus Prop 209 (assuming it stands as is), will only apply to those bankruptcies filed after December 5, 2022. Depending on when your chapter 13 was filed (if before December 5th, then you need to file a new bankruptcy. But that does not get you out of the mess currently in place about Prop 209. If you are represented by an Arizona attorney - talk to them about your options. If not, then contact an experienced chapter 7 and 13 attorney to learn about your options.
Feel free to contact our office for a free consultation (again assuming you are not already represented by an Arizona attorney).
I hope this is helpful.
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