Can I turn my chapter 13 into a chapter 7 since I can't afford the car payments? 16 Answers as of November 06, 2014

I have a secured car loan, it's the only secured creditor within my chapter 13 (non confirmed). The car loan holder failed to file on the dead line. Can I turn this into a chapter 7 because I can't afford the payments? Can I keep the car?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Freeman Law Group, LLC
Freeman Law Group, LLC | Derek Freeman
There are many things that could prevent you from filing a chapter 7. Your income might be too high, you might have too many nonexempt assets, you might have too many nondischargeable debts, etc. So I can't answer your question about whether you can or should convert your 13 to a 7. As for keeping your car, if you can't make payments in a chapter 13, what makes you think you can afford payments in a chapter 7? Suffice it to say, if you can't make payments, a chapter 7 is not going to save your car. You have to make payments to a secured creditor if you expect to keep the collateral.
Answer Applies to: Colorado
Replied: 11/6/2014
Stephens Gourley & Bywater | David A. Stephens
You can convert to chapter 7 if you are otherwise eligible. However, you will not be able to keep the car unless the car lender agrees to it.
Answer Applies to: Nevada
Replied: 11/4/2014
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
Talk to your lawyer (or pay a lawyer for his or her advice) about converting the case, and doing a 722 Redemption (if you Google this phrase, you will find tons of information). I don't give free legal advice to people have filed, but I can save folks like you money and lots of heart ache. Good luck!
Answer Applies to: Colorado
Replied: 11/4/2014
Ronald K. Nims LLC | Ronald K. Nims
As long as you qualified for a Chapter 7 on the date you filed the Chapter 13 - you can convert your 13 into a 7. The main issue is whether your income is under the limit for your state.
Answer Applies to: Ohio
Replied: 11/3/2014
Mauritz Van Niekerk, Attorneys at Law
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
yes all you have to do is a motion to convert
Answer Applies to: New York
Replied: 11/3/2014
    Tokarska Law Center
    Tokarska Law Center | Kathryn U. Tokarska
    Unfortunately answering this question cannot be done without some more important information. If you filed Chapter 13 on your own, without an attorney, I strongly urge you to see a lawyer right away. Statistically speaking, less than 1% of Chapter 13's are successful when attempted without legal representation, which means filing no your own is not a good idea. I can tell you that in general you cannot keep property that is collateral for a loan unless the loan payments are being paid or there is some legal basis to avoiding the lien(s) on the property. Avoidance of liens applies in some narrow circumstances. More facts are needed if this can be accomplished in your case. Generally speaking, yes Chapter 13 can be converted to a Chapter 7, provided that you "qualify" for Chapter 7 discharge. Insufficient facts have been provided to determine whether you qualify for chapter 7 discharge and whether obtaining that discharge will accomplish your goals. A different question from can I do it, assuming you qualify for chapter 7 discharge, is whether converting to chapter 7 is a good idea. This might be even more important. I would want to know more information about your unsecured debts as well. Does it include student loans, income taxes, child support? Also determine why the chapter 13 is not working? Did you fail to account for reasonable and necessary expenses in calculating your Plan payment, are your actual living expenses not reasonable & necessary, is the income you earn simply too low to support the current secured debt obligations? An even brief consultation with a local attorney where they can look over the case and ask you some questions will go a long way toward doing the right thing. Doing it right at the start is easier than fixing mistakes later.
    Answer Applies to: California
    Replied: 11/3/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Just because they have not filed a proof of claim doesn't mean they are not a secured creditor. Their name is on your title so you could not sell it without their approval or knowledge.
    Answer Applies to: New York
    Replied: 11/3/2014
    Eranthe Law Firm
    Eranthe Law Firm | Cate Eranthe
    Why are you in a Chapter 13? Is it to catch up on car payments? If so, then you need the plan. If you shouldn't be in a Chapter 13 to begin with - no reason to be there and no discretionary income to pay into a plan - then you can make a motion to convert it to a Chapter 7. You can keep the car if you can make the payments. Why would you think you could stop paying and also keep the car? As you said, an auto loan is a secured debt. That means the loan is secured by the property (auto). The Chapter 7 will discharge the debt and you'll have no personal liability unless you reaffirm it. That means if the lender repossesses the vehicle they can't also obtain money from you. It does NOT mean you can keep the car and not pay for it.
    Answer Applies to: California
    Replied: 11/3/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You can only keep the car if you pay for it. What chapter you are does not matter on this issue.
    Answer Applies to: California
    Replied: 10/31/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    You cannot have your cake and eat it too. If you qualify to convert to a Chapter 7 as a result of a loss of income or increase in expenses, you either must continue to pay for the car or you can expect the repo man to visit once your Chapter 7 is complete.
    Answer Applies to: Nevada
    Replied: 10/31/2014
    EDWARD P RUSSELL | EDWARD P RUSSELL
    You can convert from a Ch 13 to a Ch 7 at anytime but you will still have to make payment for the car if you want to keep it.
    Answer Applies to: Minnesota
    Replied: 10/31/2014
    Law Offices of Daniel J Winter
    Law Offices of Daniel J Winter | Daniel J Winter
    You might be able to convert; There are issues that you need to discuss with an attorney; if you don't have one, call an attorney to set up a consultation.
    Answer Applies to: Illinois
    Replied: 10/31/2014
    D.J. Rausa, Attorney at Law | D.J. Rausa
    If you convert the case to a chapter 7, then the car company will come for all the monthly payments, or repossess. You should file your own secured Proof of Claim for the car company.
    Answer Applies to: California
    Replied: 10/31/2014
    Southern Michigan Bankruptcy Center | Craig Jackson
    You may convert to a Chapter 7 case, provided you have not filed a Chapter 7 case within the past 8 years. You won't be able to keep the car if you can't stay current or pay off the balance (reaffirm or redeem) of the auto loan. Please let me know if you have additional questions.
    Answer Applies to: Michigan
    Replied: 10/31/2014
    Danville Law Group | Scott Jordan
    Yes, you can file a motion to convert to a Chapter 7. You will only be able to keep the car is you get current on the loan and continue to make the monthly payments.
    Answer Applies to: California
    Replied: 10/31/2014
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    Yes. Talk to your attorney about converting to a Chapter 7.
    Answer Applies to: Alabama
    Replied: 10/31/2014
Click to View More Answers:
12 3 Free Legal QuestionsConnect with a local attorney