Reconsidering the Bankruptcy Chapter After Filing
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Reconsidering the Bankruptcy Chapter After Filing

| Oct 4, 2017 | Uncategorized |

Why should somebody reconsider the bankruptcy chapter after filing it? The matter is that our life can twist unexpectedly and after beginning your bankruptcy case your situation might suddenly change. Or for a few other reasons you might no longer intend to remain under the bankruptcy chapter that you’re now. Unfortunately, dismissing your case can be complicated  in either Chapter 7 of the bankruptcy code, or Chapter 13. Altering from one Chapter to the other– converting the case– is normally enabled. We begin today with some reasons why you might intend to reconsider the bankruptcy chapter after filing.

 

Why Would You Want to Change Your Chapter 7?
Under Chapter 7 , the attention is paid to your assets and debts at a set moment in time, which is the situation when you were filing bankruptcy. That’s why this chapter is also called “straight bankruptcy” and doesn’t usually involves any changes. So if you have done a thorough analysis of your financial circumstances then nothing should go wrong.

However, here are some reasons you may need to reconsider your bankruptcy under Chapter 7:

– Inheritance. If you inherit any assets from a relative that died within 180 days of the filing of your bankruptcy case,  according to  Section 541(a)(5) of the Bankruptcy Code  this inheritance becomes available to pay off your debts.

– Medical charges. If shortly after filing your case you were seriously injured and got new medical debts as a result of having insufficient medical insurance, it cannot be included and discharged in your case because that financial obligation did not exist when your case was filed.

– You may be not aware at the time your case is filed that you were entitled to a valuable asset.

Why Would You Want to Change Your Chapter 13?

Chapter 13 is a bit more complicated and more things can go not the way you wanted. In Chapter 13 it is explained how much and when your creditors will be paid, and creditors could object the plan as well as in some cases compel it to be changed before it’s authorized by the bankruptcy judge. Then you need to comply with the terms of the plan, over the course of three to five years, which give a lot of time for your situations to change. The emphasis is on your financial situation not at a set moment in time but instead during the years of your  case. Your Chapter 13 strategy normally assumes that your earnings and expenses will stay exact same, or else occasionally aims to predict how they may change in the future.

Consequently, a wide range of things can happen and change your mind. Here are some of the most typical:

– Your original aim was to protect your house from foreclosure, but you found new work which needs you to relocate, eliminating the main objective of your case.

– You filed a joint Chapter 13 situation , however two years later you experience a separation, entirely changing your financial situation.

– Your revenue is significantly decreased; so much so that even modifying your Chapter 13 plan is not viable, making you no longer eligible for Chapter 13.

– Your income is substantially enhanced a year into your situation; so much to make sure that you become obligated to modify your strategy to pay most or all of your financial debts.

 

If you have already filed for bankruptcy, but feel that the current Chapter doesn’t suit you anymore – James “Jack” Setters, a professional bankruptcy attorney with 20+ years of experience is here to help you. Just give us a call!