Fokkena v. Chapman (In Re Chapman), 447 B.R. 250

U.S. Trustee appeals bankruptcy court orders denying motions to dismiss under §707(b) in Chapmans and Cruse.
Chapmans filed Chapter 13, converted to Chapter 7 after creditors obtained relief from stay; reasons for conversion include reduced income and increased expenses.
Cruse filed Chapter 13, later converted to Chapter 7; her Chapter 13 plan was in jeopardy due to disability and later marriage to a high-earning spouse.
Bankruptcy courts upheld that §707(b)(1) did not apply to cases converted from Chapter 13 to Chapter 7, so the §707(b)2/3 analyses were not triggered.
This panel reverses and remands for determinations of dismissal under §707(b)(2) and (3) in light of Resendez v. Lindquist and holds §707(b)(1) applies in these converted cases.
The issue presented includes (1) whether §707(b)(1) applies in converted cases and (2) whether the orders denying §707(b) motions are final for purposes of appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §707(b)(1) applies to converted Chapter 13 cases	U.S. Trustee contends §707(b)(1) applies to converted cases	Debtors contend §707(b)(1) does not apply after conversion from Chapter 13 to Chapter 7	Yes, §707(b)(1) applies in converted cases
Are the orders denying dismissal under §707(b) final for appeal	U.S. Trustee argues orders are final	Debtors argue orders are not final	Yes, the orders denying §707(b) motions are final
Remand for §707(b)(2)/(3) analysis under appropriate standard	Proceed with §707(b)(2)/(3) analysis if applicable	N/A	Remand for determinations under §707(b)(2) and (3)

Stuart v. Koch, 109 F.3d 1285 (8th Cir. 1997) (appealability of orders denying dismissal under §707(b))
Resendez v. Lindquist, 691 F.2d 397 (8th Cir. 1982) (debtors deemed to have filed a Chapter 7 case at the time Chapter 13 was filed on conversion)
In re Draisey, 395 B.R. 79 (8th Cir. BAP 2008) (standard of review; issues of fact reviewed for clear error, legal conclusions de novo)