The most common reasons for filing a Chapter 13 bankruptcy would be for protection from a pending foreclosure or to pay back unsecured debt based on non-exempt equity in real property. As situations change, a bankruptcy filing can as well. A Chapter 13 Bankruptcy may either be modified (change in the Bankruptcy Plan post-confirmation) or converted to another Chapter, usually to a Chapter 7 Bankruptcy. The conversion is triggered by a change in income or intent generally regarding real property. Whether a modification or conversion is desired a motion must be filed and approved by the Bankruptcy Court. The motion must show cause for conversion or change in circumstances for modification.
Normally, in a Chapter 7 case, only prepetition debts are payable from the estate and are subsequently discharged. Postpetition debts are not discharged, nor are they paid out from the bankruptcy estate. However, when the Chapter 7 is a conversion from another chapter, then debts incurred postpetition but pre-conversion become part of the debts that are paid out of the estate and are subsequently discharged.
Conversion and modification in Chapter 13 Bankruptcy can be technical and it is recommended that one seek assistance from a competent attorney specializing in Bankruptcy Law.
If there are any general questions or topics you would like to read about relating to bankruptcy law in the Philadelphia, Pennsylvania region, you may contact the Philadelphia Bankruptcy Lawyersat Sadek Law Offices, LLC at 215-545-0008 or (877) 4-LAW-411 or email brad@sadek-cooper-site. Thank you.