If you want to keep your North Carolina home or other property, you may want to consider filing for Chapter 13 bankruptcy. However, if you can’t keep up with the plan payments, you may want to convert a Chapter 13 to a Chapter 7 filing.
Do you qualify for Chapter 7 bankruptcy?
You will need to prove that you don’t have enough disposable income to comply with the terms of a Chapter 13 repayment plan. Also, you will need to show that something significant happened that has rendered you unable to make plan payments each month. For instance, a loss of income or an unexpected expense may result in your case being changed from a Chapter 13 to a Chapter 7 case. You should be aware that you cannot file for Chapter 7 bankruptcy if you have had a previous liquidation bankruptcy case discharged in the past eight years.
Your property may be liquidated if a conversion takes place
If you decide to convert to Chapter 7 bankruptcy, your home, car or other property may be sold off to pay creditors. However, certain items may be exempted from liquidation by state or federal law. If you incurred new debt after filing for Chapter 13 bankruptcy, in a Chapter 7 proceeding, it may be eligible to be discharged.
Filing for personal bankruptcy may help you get a handle on credit card bills, medical debts or other financial obligations that you may have. In some cases, debt balances will be significantly reduced or eliminated in a Chapter 7 bankruptcy proceeding. An attorney may help you learn more about how to qualify for Chapter 7 bankruptcy or the potential benefits of converting a Chapter 13 case to a Chapter 7 proceeding.