Introduction — Why conversions matter
If you’ve filed Chapter 13 and your financial situation changes, or if you filed Chapter 7 but now have steady income and want to reorganize, converting between chapters can be an effective tool. Federal law gives debtors specific rights to convert in either direction (subject to eligibility limits and timing rules) — but conversion changes the case’s mechanics, your exposure to liquidation, and the timing of any discharge. This article explains the legal rights, common reasons to convert, practical consequences, and the typical court and clerk procedures you’ll encounter, with notes for Los Angeles / Central District of California practice.
Key legal points: a Chapter 13 debtor has an absolute right to convert to Chapter 7 under 11 U.S.C. § 1307(a). Likewise, an individual in Chapter 7 generally has a statutory right to convert to Chapter 13 under 11 U.S.C. § 706(a), though that right may be limited in some circumstances (for example, a one‑time right if the case was previously converted). These statutory authorities establish the basic conversion rights but courts and local rules control the filing mechanics.
Pros and cons: Convert Chapter 13 → Chapter 7
Why debtors convert from Chapter 13 to Chapter 7
- Can't afford the Chapter 13 plan: If you can no longer make plan payments because of job loss, income reduction, or unexpected expenses, conversion lets you seek a Chapter 7 discharge rather than failing a Chapter 13 plan.
- Faster discharge: Chapter 7 usually results in discharge much sooner than Chapter 13 (many Chapter 7 individual cases complete in a matter of months versus the 3–5 year Chapter 13 plan).
- Stop continued plan obligations: Conversion ends the obligation to continue paying a Chapter 13 trustee under the confirmed plan (subject to estate administration in Chapter 7).
Risks and tradeoffs when converting to Chapter 7
- Liquidation risk: Chapter 7 is a liquidation chapter — a trustee may sell nonexempt assets for creditors. Whether anything is sold depends on exemptions and liens; many consumer Chapter 7 filings are “no‑asset” cases, but conversion exposes nonexempt property to the Chapter 7 estate.
- Loss of cramdown or plan protections: Chapter 13 lets debtors catch up mortgage arrears or modify certain secured claims through a plan; converting may terminate those plan remedies and could expose secured creditors to remedies under state law.
- Credit and collateral consequences: Converting to Chapter 7 may affect which debts are discharged and how secured claims are treated; consult counsel before switching if home retention or vehicle value are at issue.
Pros and cons: Convert Chapter 7 → Chapter 13
Why debtors convert from Chapter 7 to Chapter 13
- Repayment to save property: If you want to keep collateral (home, car) that a Chapter 7 trustee might administer or that you cannot reaffirm, Chapter 13’s plan structure allows you to repay arrears and keep the property over 3–5 years.
- More debts may be dischargeable: Chapter 13’s discharge can be broader for certain types of debts (subject to statutory exceptions) because the debtor pays under a confirmed plan.
Limits and cautions
- Eligibility and one‑time rules: The right to convert a Chapter 7 case to Chapter 13 exists, but Section 706(a) and related rules limit conversions in cases that have already been converted between chapters; counsel should confirm eligibility before filing.
- Longer commitment: Chapter 13 usually requires a 3–5 year plan (36 months if below‑median income in many cases; 60 months is typical for above‑median income), so converting to Chapter 13 creates a multi‑year payment obligation.
- Plan feasibility and trustee oversight: The court must confirm a feasible plan; the trustee and unsecured creditors will review incomes, expenses, and proposed distributions.
Recent developments affecting strategy
Bankruptcy law and case outcomes can change strategy. For example, recent Ninth Circuit precedent (Mission Hen, LLC v. Lee, 9th Cir. 2025) clarified that certain short‑term junior mortgage claims that mature during a Chapter 13 plan may be bifurcated and treated differently — an important factor when a homeowner considers whether to remain in or convert into Chapter 13. That decision demonstrates how circuit rulings can affect whether Chapter 13 offers tools (like lien bifurcation/cramdown in limited circumstances) that Chapters 7 cannot provide. If your case involves mortgage modification, junior liens, or lien‑stripping issues, local counsel should analyze the impact of recent case law.
Process & practical steps (how to convert, fees, and Los Angeles notes)
Basic filing mechanics
How you convert depends on direction and local practice. Federal rules provide the framework, but many districts (including the Central District of California) use a Notice of Conversion procedure for debtor‑initiated Chapter 13 → Chapter 7 conversions: conversion occurs on filing the notice and usually does not require a court hearing. Local rules list the required post‑conversion documents (Federal Rules of Bankruptcy Procedure 1017 and 1019 explain conversion paperwork). The Central District of California posts a local conversion procedure and forms for Chapter 13 → 7 notices.
What to file and immediate obligations
- File the Notice of Conversion (or motion if local rules require a motion) and pay any clerk conversion fee required by the district. Many courts bill a small conversion fee; check the clerk’s fee schedule.
- Continue cooperating with the trustee and attend any § 341 (meeting of creditors) hearings called after conversion; a new trustee may be appointed in Chapter 7 and will evaluate exempt vs. nonexempt property.
- If converting Chapter 7 → Chapter 13, you will typically need to submit a proposed Chapter 13 plan (local rules commonly require a plan be filed shortly after conversion — some districts expect it within two weeks). The court will review feasibility, eligibility, and confirmation requirements.
Practical checklist before you convert
- Speak with a bankruptcy attorney — conversion can change whether you keep property (exemptions), your discharge timing, and how secured creditors are treated.
- Run an exemptions inventory: identify what property is exempt under California law (or the federal exemption scheme you elected) and whether nonexempt assets exist.
- Confirm costs and timing: confirm clerk fees, the trustee’s likely actions, and how conversion affects pending motions, reaffirmations, or ongoing adversary proceedings.
- Consider mortgage/vehicle timing: if your goal is to keep a home or vehicle, analyze whether Chapter 13 plan options (cure and reinstate, cramdown/lien‑strip where available) are practical before converting away from them.
Local (Los Angeles) tips
Because local bankruptcy practice varies, debtors filing in Los Angeles (Central District of California) should use the court’s conversion forms and follow LBR 3015‑1 and LBR 1017‑1 guidance for Chapter 13 → 7 conversion filings. The court maintains local forms and a checklist explaining required documents after conversion. If you are represented, your attorney will handle the notice and post‑conversion filings; if you are pro se, contact the clerk’s office or a local self‑help clinic to ensure procedural compliance.
When to get urgent help
If you are behind on mortgage payments and facing foreclosure, or if a creditor has filed a motion to convert or dismiss your case for cause, contact a bankruptcy attorney immediately. Conversion may be an option to obtain a quicker discharge or to preserve assets, but the wrong move can produce unintended loss of property or loss of plan protections.
Summary
Conversion between Chapter 13 and Chapter 7 is legally available, often straightforward to file, and can be strategically valuable — but it is a consequential decision. Chapter 13 offers plan‑based retention and cramdown tools (subject to eligibility and evolving case law), while Chapter 7 offers a faster route to discharge but exposes nonexempt assets to liquidation. Always confirm local filing requirements and consult counsel about exemptions, pending motions, and recent case law that may affect the outcome in your jurisdiction.