• Chapter 7 bankruptcy can be converted to Chapter 13, or re-filed after a waiting period.gavel image by Cora Reed from Fotolia.com
  
  

Converting Chapter 13 to Chapter 7

• A Chapter 7 bankruptcy filing typically requires a delay after a previous Chapter 13 filing, but an open Chapter 13 case can be converted to Chapter 7. The U.S. bankruptcy code allows this conversion for any reason. If an individual cannot meet the structured payments required under Chapter 13, he may be able to discharge those debts by converting to Chapter 7.
  
  

Avoiding Chapter 7

• Converting or refiling for Chapter 7 bankruptcy can come with significant disadvantages. Under Chapter 7 bankruptcy, assets must be liquidated, which can mean the loss of possessions such as homes, vehicles and businesses. To avoid these liquidations, individuals undergoing Chapter 13 can work with their creditors and the court to create a repayment plan within their budget without losing possessions.
  
  

Bottom Line

• While filing both Chapter 13 and Chapter 7 bankruptcy is possible and legal, it is usually not recommended. Multiple bankruptcies reflect very poorly on credit reports, and can cause long-term financial harm. Negotiating the terms of a Chapter 13 plan and repaying creditors while avoiding total liquidation is usually the best option.