I Converted My Chapter 13 Bankruptcy to a Chapter 7

Question:

Dear Steve,

I filed chapter 13 in August 2013, then converted to chapter 7 in late 2017.

I’m not sure if this is necessary to assist with answering my question but when I converted I had a relatively small amount left to pay under my chapter plan. In fact, once I converted, my finance company for my car actually sent me the title.

My question is since I converted so late into my chapter 13 plan, does it drop off my credit report in 7 years or does it drop off in 10?

Just wondering how the drop off time works with conversions. I haven’t been able to locate any information online at all.

Tonya

Answer:

Dear Tonya,

My opinion is that this is two separate events and the conversion is irrelevant. The reason is this process is automated and looking for the trigger events rather than something that a human applies logic to.

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The Chapter 13 bankruptcy should appear for seven years from the date it was filed.

I don’t see how the conversion to a Chapter 7 would be treated any differently than the current policy of reporting a Chapter 7 filing for up to ten years from the filing date.

The conversion process is something called a Chapter 20 bankruptcy but the reality is it is two different filings.

Realistically the fact it will appear on your credit report is of no concern as long as you actively rebuild your credit after the final discharge.

Your credit report should show a true and accurate listing of factual events. In your case it is the filing of Chapter 13, dismissing that, and filing a Chapter 7.

In hindsight, it’s too bad the 13 just didn’t finish since you were so close to the end. I know this is easy for me to say but in the grand scheme of your credit, this is not the end of the world. This will all work out.