Glossary

Conversion

Written by JaredLast reviewed 2026-08-25

What is conversion in bankruptcy?

Conversion is moving an open bankruptcy case from one chapter of title 11 to another without filing a new case. The docket number stays the same, the case stays open, and — under 11 U.S.C. § 348(a) — the original petition-filing date carries forward too. What changes is which chapter's rules govern the case going forward: a Chapter 13 case that converts to Chapter 7 stops being a repayment plan and becomes a liquidation case; a Chapter 7 case that converts to Chapter 13 gains a repayment plan it didn't have before.

The two directions relevant to a financed car — Chapter 7 to Chapter 13, and Chapter 13 to Chapter 7 — are governed by different statutes, and mixing them up is an easy mistake to make, since both use nearly identical "at any time" language.

Which statute governs converting from Chapter 7, and which governs converting from Chapter 13?

Section 706 only ever moves a case out of Chapter 7. Section 1307 only ever moves a case out of Chapter 13. Neither one reaches into the other's territory:

The procedural gap in the middle two rows matters more than it looks. A debtor converting a Chapter 13 case to Chapter 7 under § 1307(a) doesn't ask a judge for permission at all — Rule 1017(f)(3) makes the notice itself the conversion order, though whether a court can later refuse to honor a bad-faith notice is contested, as the last section explains. A debtor converting a Chapter 7 case to Chapter 13 under § 706(a) files a motion instead, served on the trustee and other parties under Rule 1017(f)(2), which gives them a chance to object before the case actually converts.

Does conversion reset the case's filing date?

No. 11 U.S.C. § 348(a) says conversion "does not effect a change in the date of the filing of the petition, the commencement of the case, or the order for relief," except in two narrow situations spelled out in § 348(b) and (c) that don't concern a car loan's age. That single sentence is why conversion doesn't give a filer a second bite at the 910-day clock: the hanging paragraph at the end of § 1325(a) measures a car loan's age against "the date of the filing of the petition," and conversion never moves that date. A loan that was 950 days old — outside 910-day protection — when a Chapter 7 case was filed is still 950 days old measured from that same date if the case later converts to Chapter 13. Details on how that window is counted, and what it protects, are on the 910-day rule glossary page.

What happens to a confirmed Chapter 13 plan and its trustee when the case converts to Chapter 7?

The confirmed plan stops governing the case, and the Chapter 13 trustee's job in it ends. 11 U.S.C. § 348(e) says conversion "terminates the service" of whatever trustee was serving before conversion — the standing Chapter 13 trustee described on the Chapter 13 trustee glossary page has no further role once the case is Chapter 7, and a Chapter 7 panel trustee takes over administering the case instead.

That handoff raised a real question the Supreme Court had to answer: what happens to plan payments the Chapter 13 trustee was holding but hadn't yet paid out to creditors at the moment of conversion? In Harris v. Viegelahn, No. 14-400 (U.S. May 18, 2015), a unanimous Court held those undistributed postpetition wages go back to the debtor, not into the new Chapter 7 estate — reasoning from § 348(f)(1)(A)'s estate-property rule together with § 348(e)'s termination of the trustee's authority to keep disbursing them to creditors. A debtor who converts mid-plan doesn't forfeit money the trustee was sitting on when the case changed chapters.

The converted case also runs on a new set of deadlines under Federal Rule of Bankruptcy Procedure 1019, renumbered by the restyling that took effect December 1, 2024. In a Chapter 13 case converted to Chapter 7, Rule 1019(e)(2)(A) gives the debtor 14 days after conversion to file a schedule of unpaid debts incurred after the petition but before conversion, and Rule 1019(e)(2)(B) gives the trustee 30 days after conversion to file and send the United States trustee a final report and account. Separately, Rule 1019(a)(2) sets a new statement-of-intention deadline for the converted Chapter 7 case, covered below.

What happens to a financed vehicle when a case converts?

It depends on the direction, and on what the Chapter 13 case had already done with the loan before conversion:

The Chapter 13-to-Chapter 7 direction is the one filers researching an underwater car loan usually care about, because it can open redemption at the vehicle's replacement value under § 722 in place of a full-balance Chapter 13 payoff — that specific tradeoff, including why converting changes the whole case and not just one loan, is worked through on the underwater-910-day-car scenario page and the redemption glossary page. What § 348(f)(1)(C) adds to that picture is the reverse risk: a debtor who partly paid down a crammed-down car loan in Chapter 13 — one that was more than 910 days old and got split under § 506 into a secured piece at the car's value and an unsecured piece for the rest — doesn't carry that discounted value into a converted Chapter 7 case. The claim goes back to the full contract amount, minus whatever was actually paid, not the Chapter 13 valuation.

Is the right to convert absolute in either direction?

Not entirely, and the two directions aren't limited the same way. In Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007), a divided Supreme Court held 5-4 that a bankruptcy court can deny a debtor's § 706(a) motion to convert a Chapter 7 case into Chapter 13 where the debtor's bad faith would make the new Chapter 13 case immediately subject to dismissal or reconversion for cause under § 1307(c) anyway. The majority rested that limit on two footings, not one: § 706(d)'s requirement that "the debtor may be a debtor under such chapter," and the broad authority § 105(a) gives bankruptcy judges to take any action necessary or appropriate "to prevent an abuse of process."

Section 1307(a)'s conversion right sits on different procedural footing — but that is not the same as sitting on firmer ground, and this is the part of conversion law most often stated too confidently. Rule 1017(f)(3) does let a § 1307(a) conversion take effect on the debtor's notice with no court order, so there is no motion for a judge to grant or deny. Whether that leaves a court powerless to police a bad-faith exit is a genuinely open question on which courts have divided. The Ninth Circuit held in Rosson v. Fitzgerald (In re Rosson), 545 F.3d 764 (9th Cir. 2008), that after Marrama a Chapter 13 debtor's parallel "at any time" right to walk away under § 1307(b) "is not absolute, but is qualified by the authority of a bankruptcy court to deny dismissal on grounds of bad-faith conduct" or to prevent an abuse of process under § 105(a) — and Rosson expressly catalogued the split, contrasting the Second Circuit's absolute-right holding in In re Barbieri, 199 F.3d 616 (2d Cir. 1999), with the Eighth Circuit's contrary rule in In re Molitor, 76 F.3d 218 (8th Cir. 1996). Rosson also noted that a bankruptcy court may convert on its own motion under § 105(a) even though § 1307(c) speaks of a request by a party. So whether a filer's own § 1307(a) conversion notice is truly unreviewable depends on the circuit, and a filer should not treat it as settled. What is uncontroversial is that a court can convert or dismiss the resulting Chapter 7 case for cause under § 707 if that case turns out to be abusive.

This page explains how conversion works under the Bankruptcy Code; it is not legal advice for a specific case. Whether converting makes sense for a particular filer's car loan, other debts, and budget depends on facts a bankruptcy attorney needs to see — the confirmed plan, the loan documents, and the rest of the schedules. The Chapter 13 pillar page and the Chapter 7 pillar page cover how each chapter handles a financed vehicle more broadly.