Yes. Generally speaking, conversion becomes necessary when a change in circumstances makes owning a home or car impossible because the Chapter 13 plan payments are too high. A very typical reason for conversion is when somebody in the household loses their job or has their hours cut at work.
The bankruptcy code specifies that you still must still qualify for a Chapter 7, and recent court decisions indicate that clients must still pass the means test in order for the conversion to take place.
However, the possibility of conversion is important for people to keep in mind if they are behind on mortgage or car payments and are unsure what the future holds. A client may be able to file for Chapter 13 in an attempt to catch up on past due payments while being assured they have other options if the Chapter 13 plan does not work out in their favor.
Lots of stuff to think about, right? The best way to come up with a good plan for your family is to set up a free, initial consultation. For those of you in Western North Carolina, I would be happy to help.