Section 348 of the Bankruptcy Code generally permits
conversion of a bankruptcy case from one chapter to another. If a Chapter 7 has not been
converted from a Chapter 11, 12, or 13 proceeding, the debtor may have an absolute right
to convert the case to any other chapter at any time. The conversion may be voluntary, as
where the debtor converts from a Chapter 7 liquidation bankruptcy to a Chapter 13
reorganization. The conversion may also be involuntary, as where a Bankruptcy Court
converts to a Chapter 7 liquidation because the debtor has not complied with certain
requirements of a Chapter 13 case. However, only a debtor may request a conversation of a
bankruptcy 7 to a chapter 12 or chapter 13. The debtor must also meet the requirements of
the Chapter to which it is being converted. See Section 706 of the Bankruptcy Code,
reproduced for illustration purposes only here.
The conversion of a case generally does not change the
original date of the bankruptcy filing or the automatic stay. Except for administrative
expenses, debts of a debtor incurred between the date of the bankruptcy filing and the
date of conversion will be treated as pre-petition claims. See Section 348 of the
Bankruptcy Code, reproduced for illustration purposes only here. Actual cases should always
be discussed with your actual legal advisor or legal department.
An individual debtor has the right to redeem tangible
personal property from a lien that secures dischargeable consumer debt if the property is
held mainly for personal, family or household use, and it either qualified as exempt property as provided under Bankruptcy
Code Section 522, or has been abandoned by the Trustee. The Trustee may abandon property
that is either burdensome or of inconsequential value to the bankruptcy estate after
notice and a hearing. See Section 554 of the Bankruptcy Code, reproduced here for
illustration purposes only.
The debtor's right of redemption cannot be waived. The debtor
may retain such collateral by paying the secured party the amount of the allowed secured
claim, determined by the market value of the collateral. To redeem the collateral, the
debtor generally must make payment in a lump sum and not in installment payments. However,
there may be exceptions to this. In an actual case, a creditor should discuss with its
actual legal counsel or legal department. Section 722 of the Bankruptcy Code, is
reproduced for illustration purposes only here.
In a Chapter 7 case, an individual debtor with secured
consumer debts (such as a personal automobile loan) must file a Statement of Intention to
retain or surrender the collateral. The debtor may elect to redeem the property or
reaffirm debts secured by the collateral.This Statement of Intention must be filed by the
date of the 341 Meeting, or within 30 days after filing the petition, whichever occurs
first. See Section 521 of the Bankruptcy Code, reproduced here for illustration purposes
only .
Within 45 days after filing the Statement of Intention, the
debtor must actually implement the intent, by returning, redeeming, or reaffirming.
Section 704 requires the trustee to monitor this performance by the debtor. A copy of
Section 704 of the Bankruptcy Code is reproduced for illustration purposes only here. The
statement of intention may provide to secured creditors sufficient information at the 341
Meeting to resolve issues involving secured consumer debts.
