489 B.R. 478
Bankr. S.D. Ga.2013Background
- Debtor Stacy C. Davis filed a Chapter 13 petition (June 26, 2012) and later converted to Chapter 7.
- Trustee argued Davis may be ineligible for Chapter 13 under §109(e) due to debt limits.
- Debtor earns about $200,000 annually, household of three; means test shows income well above Georgia’s median.
- UST seeks dismissal under §707(b)(2) (presumption of abuse) or §707(b)(3) (bad faith/totality of circumstances).
- Debtor contends §707(b) does not apply to cases originally filed under Chapter 13 that convert to Chapter 7; UST argues it applies to all Chapter 7 cases involving individuals.
- Court must decide whether §707(b) applies to converted cases and, if so, apply it to this case; findings and conclusions address the statutory interpretation and its implications.
- Discovery in the case is to be completed by May 31, 2013, and a status conference will be set on the next available Chapter 7 date in June.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §707(b) applies to converted cases | Davis: §707(b) applies only to cases originally filed under Chapter 7 | UST: §707(b) applies to all Chapter 7 cases involving individuals, including converted cases | §707(b) applies to cases converted from Chapter 13 to Chapter 7 |
| How to interpret 'filed under this chapter' in §707(b)(1) after conversion | Text supports 'filed' modifying both 'by an individual debtor' and 'under this chapter' | Text supports broader reading; conversion date incorporated | Plain language supports applying §707(b) to converted Chapter 13 cases |
| Policy/purpose support for applying §707(b) to converted cases | Court finds alignment with pre-BAPCPA practice, purpose to curb abuse, and statutory structure |
Key Cases Cited
- Lamie v. U.S. Trustee, 540 U.S. 526 (U.S. 2004) (statutory text interpretation—plain meaning favored in absence of contrary intent)
- United States v. Ron Pair Enters., Inc., 489 U.S. 235 (U.S. 1989) (plain meaning and textual interpretation guidance)
- In re Willis, 408 B.R. 803 (Bankr.W.D.Mo.2009) (applies §707(b) to converted Chapter 13 cases)