What is the process for converting a Chapter 13 bankruptcy to a Chapter 7 bankruptcy in California?

To convert a Chapter 13 bankruptcy to a Chapter 7 in California, you must file a formal notice with the court and provide updated financial information. The process changes your case from a long-term repayment plan to a liquidation, where a trustee may sell non-exempt assets to pay creditors. Here is the general process: Step 1: Confirm Your Eligibility Before converting, you must determine if you qualify for Chapter 7. This requires passing the "means test," which compares your current monthly income to the median income for a California household of your size. If your income is too high, you may not be eligible to convert. Step 2: File a Notice of Conversion You must prepare and file a "Notice of Conversion of Case Under Chapter 13 to a Case Under Chapter 7 by Debtor" with the U.S. Bankruptcy Court in your district. In most situations, debtors have an absolute right to convert, and the case is converted automatically upon filing this notice. A small court fee is usually required. Step 3: File Updated Financial Documents Within 14 days of conversion, you must file several updated documents. These include a final report for the Chapter 13 case and new versions of key schedules to reflect your current financial status, such as Schedule I (Income) and Schedule J (Expenses). You must also file a new Statement of Intention, which tells the court and creditors what you plan to do with secured property like a car or home. Step 4: Attend a New Meeting of Creditors After the conversion, the court will schedule a new "341 Meeting of Creditors." You are required to attend this meeting. A new Chapter 7 trustee will be assigned to your case and will ask you questions under oath about your assets, debts, and financial affairs. Important Details and Nuances: A crucial consequence of conversion is that all property you acquired after filing for Chapter 13 but before converting to Chapter 7 becomes part of the bankruptcy estate. This includes inheritances, lawsuit settlements, or significant new assets. You must claim California exemptions to protect your property from liquidation. California allows you to choose between two sets of exemptions, one found in California Code of Civil Procedure Section 703.140 and another in the 704 series, which includes the homestead exemption (CCP § 704.730). Under California Family Code Section 760, all community property is considered part of the estate. Warnings and Limitations: The primary risk of conversion is losing property, especially assets acquired during the Chapter 13 case that are not fully protected by exemptions. Additionally, a court can prevent the conversion or dismiss your case if it finds the conversion was filed in "bad faith." This is general information and does not constitute legal advice. For complex situations, especially if you have acquired new assets, you should consult with a qualified California bankruptcy attorney.