480 B.R. 392
Bankr. M.D. Fla.2012Background
- Debtor filed a Chapter 13 petition on January 29, 2010, with a plan that abandoned a homestead and provided a 100% payout to unsecured creditors.
- After confirmation, Debtor lost her job and could not make timely Chapter 13 payments to the Trustee.
- On December 7, 2011, Debtor voluntarily converted to Chapter 7 under §1307(a) and amended schedules to reflect unemployment.
- Post-conversion, Debtor secured new employment and now has disposable monthly income of at least $1,282.94, exceeding the Means Test threshold.
- United States Trustee moved to dismiss under §707(b)(1) arguing abuse due to the post-conversion Means Test position.
- Court must decide whether §707(b) applies to debtors who originally filed under Chapter 13 and later convert to Chapter 7.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §707(b)(1) apply to converted Chapter 13 cases? | Trustee: common sense view; §707(b) applies to all Chapter 7 cases. | Debtor: plain language view; §707(b) requires original Chapter 7 filing. | Plain language; §707(b) does not apply to this converted case. |
| What remedial framework governs abuse if §707(b) does not apply? | Trustee seeks dismissal under §707(b) or alternative abuse theories. | Debtor argues against §707(b) applicability; seeks other remedies. | Court endorses plain language and discretionary dismissal under §105(a) for abuse; §707(b) not applicable here. |
Key Cases Cited
- In re Perfetto, 361 B.R. 27 (Bankr.D.R.I.2007) (example supporting common sense view and totality considerations)
- In re Fox, 370 B.R. 639 (Bankr.D.N.J.2007) (plain language interpretation; compatibility with related rules)
- In re Kellett, 379 B.R. 332 (Bankr.D.Ore.2007) (discusses treatment of Means Test and conversion issues)
- In re Dudley, 405 B.R. 790 (Bankr.W.D.Va.2009) (analyzed applicability of §707(b) where case conversion occurs)