657 B.R. 264
10th Cir. BAP2024Background
- Edward Pino (Debtor) sold property to the Stewarts, who became the sole creditors in his later-filed Chapter 13 bankruptcy.
- The Stewarts objected to Debtor’s Chapter 13 plan, arguing it was filed in bad faith and that his debts exceeded Chapter 13 eligibility limits.
- The Bankruptcy Court denied plan confirmation and subsequently converted the case to Chapter 7, finding the Debtor ineligible for Chapter 13 relief.
- After conversion, Debtor filed motions to set aside the conversion and to dismiss the bankruptcy under § 1307(b), which gives Chapter 13 debtors an absolute right to dismissal under certain circumstances.
- The Bankruptcy Court denied debtor's motion to dismiss, holding that once converted to Chapter 7, he could no longer invoke § 1307(b).
- Debtor appealed, arguing he retained an absolute right to dismissal even after conversion.
Issues
| Issue | Plaintiff's Argument (Pino) | Defendant's Argument (Stewarts) | Held |
|---|---|---|---|
| Does § 1307(b) give a debtor an absolute right to dismiss a case after conversion to Chapter 7? | Pino: § 1307(b) unambiguously provides a right to dismissal at any time, including after conversion. | Stewarts: The right to dismiss under § 1307(b) ends upon conversion; Chapter 13 provisions do not apply after conversion. | No absolute right exists post-conversion; once under Chapter 7, debtor loses § 1307(b) rights. |
Key Cases Cited
- Harris v. Viegelahn, 575 U.S. 510 (2015) (upon conversion from Chapter 13 to Chapter 7, Chapter 13 provisions no longer apply)
- Law v. Siegel, 571 U.S. 415 (2014) (courts must apply statutes as written and not rewrite statutory provisions)
- Marrama v. Citizens Bank, 549 U.S. 365 (2007) (debtor's right to convert or dismiss can be denied for bad faith or abuse, though not directly at issue here)