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QUESTION:  If I have to file a Chapter 13 Bankruptcy ... could I convert it later to a Chapter 7 (if I move out of Hawaii) and no longer have the same income, etc. Wondering how difficult that is to do?

ANSWER:  If you have a change in circumstances, particularly a loss of income, which would make the Chapter 13 not feasible, you would have to convert to a Chapter 7.  Upon doing so, you would have to attend another 341 hearing for the Chapter 7 case, so if you will be leaving Hawaii, please be sure to let your attorney know in enough time to plan, as attendance at the 341 hearing is mandatory.  It is not logistically hard to convert from a Chapter 13 to a Chapter 7, but much of the outcome depends on why you were in the Chapter 13 in the first place.  If you were in the Chapter 13 to strip off a second mortgage, or catch up on arrears on the first mortgage, it will be unlikely that you could keep the house when you convert, unless you have obtained a modification, or made some other arrangement with the mortgage lender.  If you were in the Chapter 13 in order to protect assets that are not otherwise exempt, you need to be prepared to lose those assets if you convert to a 7.  If you were in the Chapter 13 because you are considered a high income debtor, you will need to have a good explanation for why you are giving up a good job to move elsewhere (another job offer and lower costs of living, presence of family, etc.)  As with anything, make sure you discuss these circumstances with your attorney.


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