When Colorado residents are facing overwhelming debt, they want to find a solution that will give them the best possible debt relief in the shortest time. One popular option for accomplishing this is to file for personal bankruptcy.
Even once the decision is made to file for bankruptcy, however, it can be confusing for individuals to know what type of bankruptcy works best for them. What's more, they may not realize what types of bankruptcy they qualify for, even if they prefer a particular type at the beginning.
In some instances, even after a person files for bankruptcy, their petition might be converted by the court to a different type of bankruptcy. For instance, a furniture company that filed for Chapter 11 bankruptcy recently saw a court convert its case to a Chapter 7 bankruptcy. The judge concluded that the Chapter 7 option was best for creditors and other parties in the case, which involved assets of between $1 million and $10 million and debts of between $10 million and $50 million.
Conversely, if a person files for Chapter 7, but later desires to convert the case to Chapter 13, for example, the person may be able to do so as long as the debtor is eligible for bankruptcy under Chapter 13. However, there are some limits, as debtors cannot continually convert a case between different types of bankruptcy. Moreover, individuals cannot convert a case out of Chapter 7 if it was already converted to Chapter 7 from a different chapter.
While these rules may become complicated, it is best to work with a qualified attorney who can best explain the nuances involved in bankruptcy proceedings. Moreover, the bankruptcy attorney can help determine what type of bankruptcy is best from the outset, so that no conversion is needed later on in the process.
Source: Furniture Today, "Newport Furniture converts to Chapter 7 liquidation," Larry Thomas, Jul. 17, 2013