Identify the reasons for converting a bankruptcy case from one chapter to another

Question

What will be an ideal response?

Answer 1

As with dismissals, conversions may be either voluntary or involuntary. A voluntary conversion occurs when the debtor seeks to change his or her bankruptcy filing status from one chapter to another. The debtor has the right to convert from Chapter 7 to Chapter 11, Chapter 12, or Chapter 13 as long as he or she meets the eligibility requirements of that chapter. A debtor whose income cannot support a repayment plan may be unable to convert from a Chapter 7 to 13. Conversely, a debtor may be prohibited from converting from a Chapter 13 to a Chapter 7 if, for instance, a calculation of the Means Test determines that the debtor is not eligible for Chapter 7. There may be an exception if the debtor can convince the bankruptcy court of good cause to convert.

Facts that would justify an involuntary conversion would occur when a Chapter 7 debtor is ineligible for liquidation relief because of a finding of fraud and abuse by the debtor. Another example would be when a Chapter 7 debtor becomes gainfully employed, and it is determined that he or she has enough disposable income sufficient to support the repayment of creditors under a Chapter 13