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The two most common reasons to file a motion for conversion to Chapter 13 from Chapter 13 are: 1)
to avoid dismissal when failing to make Chapter 13 payments, and 2) to discharge remaining
debts once house payments are brought current. Debtors may convert at any time, but often ask,
how do I convert Chapter 13 Bankruptcy to Chapter 7? Section 1323 provides the answer.
Also, debtors may modify the proposed plan at any time before
confirmation, and after confirmation, the court may consider further
modifications based on a motion to modify the conformed plan.
In practice. the priority of payments made by the trustee greatly
impacts the order in which debts are brought current, paid, and
eventually expire. For instance, back taxes will be paid before general
unsecured debts owed to credit card companies. Then, upon the expiration
of the plan, the remaining balances will be discharged. Knowing the
trustees payment priority opens many motions for debtors when proposing
plans, considering chapters, and deciding when the optimum result can be
achieved from conversion.
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