Ch.13 to Ch.7: Section 1307(a)
Under 11 U.S.C. section 1307(a), you have a nearly absolute right to convert your Chapter 13 case to Chapter 7 at any time. The only restriction is that the case must not have been originally filed as Chapter 7 and then converted to Chapter 13 - you cannot bounce back and forth between chapters. There is no additional filing fee to convert.
Courts have held that this right is unconditional. Even if the trustee or creditors object, the debtor's right to convert under section 1307(a) generally prevails. The only exception recognized by most courts is conversion in bad faith, such as hiding assets or abusing the process.
When to Convert from Ch.13 to Ch.7
- Income dropped: You lost your job, had hours cut, or experienced a pay reduction that makes your plan payments unsustainable
- Plan failing: You have missed payments and the trustee has filed a motion to dismiss - converting preserves your right to a discharge
- Medical emergency: An illness or injury has changed your financial picture permanently
- Divorce or separation: The loss of a second income makes plan completion impossible
- Now qualify for Ch.7: Your income has fallen below the means test threshold
Best exit strategy: If your Chapter 13 plan is failing, conversion to Chapter 7 delivers a discharge in 3-4 months instead of losing everything to dismissal. Dismissal means no discharge, no protection, and all payments made to the trustee are gone.
What Happens to Your Payments?
When you convert from Chapter 13 to Chapter 7, the Chapter 13 trustee returns any undistributed funds to you. Payments already distributed to creditors are not recovered. Your attorney may charge additional fees for the Chapter 7 portion, though many attorneys include conversion in their original fee agreement.
Ch.7 to Ch.13: Section 706(a)
Under 11 U.S.C. section 706(a), you have a one-time right to convert your Chapter 7 case to Chapter 13. This right can only be exercised once, and the conversion must be filed before your Chapter 7 discharge is entered.
Converting from Chapter 7 to Chapter 13 is particularly useful when the Chapter 7 trustee identifies non-exempt assets that would be liquidated. By converting, you keep all your property and repay creditors through a 3-5 year plan instead.
When to Convert from Ch.7 to Ch.13
- Assets at risk: The trustee has identified property you want to keep that exceeds your state's exemptions
- Mortgage arrears: You need to cure a mortgage default and Chapter 7 does not allow that
- Means test challenge: The U.S. Trustee has filed a motion to dismiss under the means test, and converting resolves the issue
- Car loan arrears: You are behind on a car payment and need the Chapter 13 plan to cure the default
One-way street: If you convert from Chapter 7 to Chapter 13 and the Chapter 13 later fails, you cannot convert back to Chapter 7. Your only options at that point are to dismiss the case or seek a hardship discharge.
The cost implications are significant. Converting from 7 to 13 means paying attorney fees for the Chapter 13, plan payments for 3-5 years, and the standing trustee's commission (typically 7-10% of plan payments). Weigh this against the value of the assets you would lose in Chapter 7.
Conversion vs. Dismissal
When your bankruptcy case is not going well, you generally face three options: convert to the other chapter, dismiss the case, or seek a hardship discharge. Here is how they compare:
| Option | Result | Discharge? |
|---|---|---|
| Convert Ch.13 to Ch.7 | Case continues under Ch.7 rules | Yes, in 3-4 months |
| Dismiss Ch.13 | Case ends, no protection | No |
| Hardship discharge | Partial plan completion accepted | Yes, limited scope |
| Convert Ch.7 to Ch.13 | Case continues under Ch.13 rules | Yes, after 3-5 year plan |
Conversion is almost always better than dismissal because it preserves your chance at a discharge. Dismissal leaves you with no debt relief and no automatic stay protection.
Hardship Discharge
If you cannot complete your Chapter 13 plan and do not qualify for Chapter 7 conversion, a hardship discharge under section 1328(b) may be available. This is a narrow but important safety valve.
To qualify for a hardship discharge, you must show three things:
- The failure to complete the plan is due to circumstances beyond your control (illness, disability, job loss)
- Unsecured creditors have received at least as much as they would have in a Chapter 7 liquidation (the "best interest" test)
- Modification of the plan is not practicable
The hardship discharge is more limited than a full Chapter 13 discharge. It does not include the "superdischarge" protections, so debts that would be nondischargeable in Chapter 7 remain nondischargeable under a hardship discharge as well. See bankruptcyhardship.org for the full requirements.
Frequently Asked Questions
Last updated: March 2026. Not legal advice.
Part of the Open Bankruptcy Project