Can You Convert a Chapter 13 to a Chapter 7 Bankruptcy?

You can convert a Chapter 13 bankruptcy to a Chapter 7, but you should only do so if your financial situation has changed since you filed and you can't afford your repayment plan. We aren’t lawyers, and it’s best you discuss your options with your trustee first, but we can give you some car buying tips during bankruptcy.

Converting a Chapter 13 Bankruptcy to a Chapter 7

Can You Convert a Chapter 13 to a Chapter 7 Bankruptcy?There are several reasons you may consider converting your Chapter 13 bankruptcy to a Chapter 7. Maybe your income situation turned sour and you don’t make as much as you used to and you can’t make your planned payments on time anymore and risk losing your assets. Or, maybe you simply want the bankruptcy to be done.

Whatever your reason, in order to convert a Chapter 13 to a Chapter 7, you must first file a Notice of Conversion. Next, you must pay the conversion fee, qualify for a Chapter 7 bankruptcy, and, in some states, take the Chapter 7 means test as well as explain to the court why you need to switch bankruptcy types.

Once the conversion is complete, you may need to give up any non-exempt property, such as a car, to pay back your creditors. Although you may lose your vehicle, the process of completing a Chapter 7 bankruptcy is quick, generally only lasting four to six months, instead of three or five years like a Chapter 13. Any remaining debt is wiped out once the bankruptcy is discharged.

Buying a Car With a Chapter 7 Bankruptcy

If you do end up losing your car after converting your Chapter 13 bankruptcy, you might be wondering when you can get another one. Ideally, you should wait until your Chapter 7 has been discharged before getting auto financing, as subprime lenders are hesitant to approve loans during an open Chapter 7 bankruptcy.

If you aren’t worried about your credit and you need a vehicle now, you could get a car loan through a buy here pay here (BHPH) dealership, but you need to get an approval from the court. These dealers finance vehicles in-house, and don’t look at your credit to determine approval.

Finding the Right Dealership for You

Finding a dealership that can work with bankruptcy auto loans is tough, especially if you’re going through an open Chapter 7 after converting it from a Chapter 13. Luckily, at The Car Connection, we can guide you in the right direction.

We're teamed up with dealers all across the country that are experts at helping people with imperfect credit, like those who've been through a bankruptcy. Get connected to a local dealership that can help you get financed by filling out our car loan request form. Get started today!


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