You can convert a Chapter 7 bankruptcy to Chapter 13 if you want to save your home from foreclosure. Learn the conversion process, eligibility, timing, and court approval.

A debtor who filed Chapter 7 has the right, in most circumstances, to convert that case to Chapter 13 under 11 U.S.C. Section 706. Conversion is often used by homeowners who initially filed Chapter 7 for a general debt discharge but then discover that their mortgage situation is more serious than expected, or who want to use the Chapter 13 repayment plan to cure arrears and keep their home.

Conversion to Chapter 13 is not automatic and does require court involvement, but in most cases, a debtor who meets the eligibility requirements has an absolute right to convert.

The Conversion Process

To convert a Chapter 7 case to Chapter 13, you file a Notice of Conversion with the bankruptcy court. In most jurisdictions, this is a straightforward filing that triggers the conversion automatically without the need for a hearing, provided you meet the eligibility requirements and no party has obtained a court order that would prevent conversion.

After conversion, you must file a Chapter 13 plan within 14 days. The plan must meet all Chapter 13 requirements, including providing for mortgage arrears in full, covering regular mortgage payments going forward, and meeting the liquidation test for unsecured creditors.

A new trustee is appointed for the converted case. The Chapter 13 trustee reviews your plan and may object if it does not meet requirements. A confirmation hearing is scheduled, typically 25 to 45 days after the plan is filed.

Any property of the estate as of the conversion date becomes part of the Chapter 13 estate. Property acquired between the Chapter 7 filing date and the conversion date may also be included in the estate.

Eligibility to Convert

The right to convert from Chapter 7 to Chapter 13 is available to most individual debtors. However, it is not absolute in all circumstances. A court can deny conversion if it finds that the conversion would be in bad faith or that the debtor does not meet Chapter 13 eligibility requirements.

Chapter 13 eligibility requires that you have regular income, that your secured debt is within the applicable debt limit, and that your unsecured debt is within the applicable limit. If your total secured or unsecured debt exceeds these limits, you are not eligible for Chapter 13 and conversion is not available.

You must also be able to fund a feasible repayment plan. If your income is insufficient to cover both regular mortgage payments and the plan payment for arrears plus other creditors, the plan will not be confirmed and the case may be dismissed.

Prior Chapter 13 cases that were dismissed within the prior year may affect the automatic stay in the converted case, so the same repeat filing restrictions discussed elsewhere in this series apply.

Timing Advantages of Conversion

Converting from Chapter 7 to Chapter 13 while the automatic stay from the original Chapter 7 case is still in effect can be an effective strategy. The stay from the original filing continues during the converted case, providing continuous protection against foreclosure.

If a lender has already filed a motion for relief from stay in the Chapter 7 case, converting before that motion is heard may give you additional time to propose and confirm a Chapter 13 plan before the court rules on stay relief. Whether a court grants stay relief after conversion depends on whether the Chapter 13 plan adequately addresses the mortgage arrears.

Conversion before the Chapter 7 discharge is entered is generally necessary. Once a Chapter 7 discharge is granted, it is harder to convert back to Chapter 13, though it is still possible in limited circumstances.

Impact on Foreclosure

Conversion to Chapter 13 stops the foreclosure timeline by preserving the automatic stay and giving the debtor access to the Chapter 13 repayment mechanism. If the converted case proceeds to a confirmed plan, the foreclosure cannot proceed as long as the debtor complies with the plan.

However, conversion is not a reset button. Lenders in the converted case can still file motions for stay relief, and courts will evaluate those motions based on the Chapter 13 plan’s adequacy and the debtor’s compliance.

For homeowners who initially filed Chapter 7 without fully considering the mortgage situation, conversion to Chapter 13 is a legally available path to save the home. The key is acting before the foreclosure sale and before the Chapter 7 case is fully closed.