*1 THORNBERRY, Before KING and Aug. Judges. Circuit KING, Judge: appellant seeks of the dis- reversal trict court’s the bankruptcy debtor/appellee’s denied the motion to con- her case affirm. Code. We 46; Brown, Jeannette, 832 F.2d 803 F.2d Cf. at 120. *2 pay tion to of her 100% debts. The bank- I. ruptcy court continued the hearing on the debtor/appellee, F. Martin The trustee’s sale. (“debtor”), voluntary filed a Giacontiere1 Chapter 7 of the petition under objected Martin to the conver- “Code”), 11 (the 701-66 §§ sion, and court denied the (1979 Supp.1989),on December August motion to convert on 1987. In (“trustee”) appointed was T. Pender John the same the bankruptcy court con- interim trustee. A meeting creditors was hearing tinued the on the trustee’s motion 22, 1987, January at which the held on private to enter into a sale until October 1. (“Martin”), A. Martin appellant, Lehman immediately appealed The debtor the order present and at which Pender was made was denying her conversion. hearing After the Martin is the permanent trustee. October the court the trust- Although is former husband. debtor ee’s motion private to enter into a sale. divorced, she and have not entered appealed The debtor also that order. Our dividing property into a final settlement disposition of this moots the debt- community estate. or’s of the court’s order granting private the trustee’s sale motion. an order bankruptcy court entered 24, 1987, on March discharging the debtor appeal, On the district court held that the of the A to section 727 Code. pursuant denial of the debtor’s motion to convert April mailed on was notice invalid. It held that a debtor’s 9, 1987, April Martin made a Chapter 1987. On convert from Chapter 7 to 13 was purchase the trustee to written offer to unrestricted the Code and that the fact formerly bankruptcy estate’s interest that the debtor had discharged personal proper- real and community-owned her Chapter prior debts under to her ty. property, In Mar- consideration motion to convert consequence. was of no mortgages on the tin offered to assume Because the court found that bankrupt- involved, to properties real assume the tax denied the conver- on the debtor’s 7 sion, liabilities listed it did not reach the issue of whether schedules, disclaim his interest in United grant of the trustee’s motion for sale Savings Bonds and a Chevrolet States was error. among the were listed debtor’s as- schedule, Chapter 7 on her
sets of claim in proof the amount
withdraw II. $55,878.42 for reimbursement for his presented issue ques- for review is a community debts. tion of law: Did the prop- erly deny the debtor’s first motion to con- the trustee filed On June vert from 13 under authority to enter into a application for section 706 of the subject Code? We sale, seeking private to consummate the holding, district court’s ques- as we do all transaction Martin. The bank- law, tions of to de novo review. 20, 1987, ruptcy July as the date court set hearing unequivocal The Code for a on the motion for the sale. in its statement of the July On the debtor filed a motion for a to convert: hearing along of the with an continuance The debtor convert a case under application to convert her 7 case to chapter 11, to a case under Chapter 13 of the Code. With one under any time, or 13 of this title at if the motion, pro- filed a the latter case has not been converted under sec- plan, reflecting an inten- 1112,1307, tion or 1208of this Any title. 1. The. debtor has changed remarried petition and subsequent filings her connected with name original since she filed her this case as petition. her appears name on that sought conversion a case time even of the first waiver Chapter 7 trustee is unenforceable. efforts this subsection to block against adversary proceedings bring 706(a). 11 U.S.C. § debtor); Easley, 72 B.R. In *3 clear that makes history of this section (Chapter 7 debtor (Bankr.M.D.Tenn.1987) encourage con- such to Congress intended to convert she allowed must be an absolute give the debtor versions another from converted previously right to convert: one-time nondischargeability judgment of after even (a) gives the of this section Subsection Caldwell, case); 67 In re 7 in a right of conversion absolute debtor one (Bankr.E.D.Tenn. 1986) 296, 300-01 B.R. reorganization a liquidation case to aof 763, Street, 765 55 B.R. (same); In If repayment case. or individual 1985) (same); In re Jen (Bankr. Cir. 9th already converted once been the case has (Bankr.S.D.Ohio B.R. nings, 31 7, chapter then 11 or to chapter 13 from (same). 1983) right. that not have the debtor does is that the debtor provision policy our support Thus, also the cases given opportunity the always be should convert right to a that debtor's conclusion repay his debts. to is, the 706(a) as indicated under section 989, Cong., 380, 95th 2d No. S.Rep. Sess. history, abso legislative its statute Ad Cong. & 1978 reprinted in U.S.Code interfere to refuse The courts one. lute 5880; H.R.Rep. 595, No. min.News extreme of right in the absence that with Cong. reprinted 2d Sess. 95th in Calder, 1978 93 circumstances. 5963, 6336. Cong. & Admin.News U.S.Code facts which allege does Because encourage intent the debt- Congressional ground to adequate provide an if true would rather convert, 13 or to seek relief we motion to deny the to premises also “The 7 is clear: than conclusion court’s the district agree respect bank to consumer of the bill with denying in erred bankruptcy court that the use of the law ruptcy are that conversion. resort; used, that if it is last should a repayment under attempt should debtors that, depending We note on future devel- 13_” H.R.Rep. No. 95th previ- opments, the fact had 1978 U.S. Cong. reprinted 2d Sess. ously discharge may a obtained a raise Cong. AdmimNews question as to what effect a motion to history no legislative contains on previously-granted convert has a dis- indicating Congress contrary language charge. itself, statute a sought to restrict debtor’s above, speaks noted in absolute terms. An discourage or to conversion. history exhaustive review of the nothing a broadly reveals which would indicate that The courts have also construed post-discharge to should be convert and have motion convert of a debtor to differently any dis treated from other. Noth- that the court does not have the ing change this the cases serves to con- to block the conversion.2 In re cretion See (Bankr.N.D.Ga. Kleber, clusion. the statute 81 B.R. 727 1987) (court to to has no discretion determine debtor has the par- to con convert “at time” and because should be allowed whether debtor ties to have not or briefed to however, are, creditors), during years repay 2. There some cases which block those seven conversion, only plan, in extreme circum- bad faith and an unfeasible see In re stances, Calder, Straugh, (Bankr.W.D.Penn. see In re 93 B.R. 41 B.R. (Bankr.D.Utah 1988) (debtor 1984) (debtor’s practicing using not feasible even income; bankruptcy attorney Chap- who had filed three best of estimate future bad also petitions past years, provide ter 13 seven of faith because failed to of transfer). ground possibly preferential dismissed bad which were filing; faith effort” debtor had also made "minimal question happens of what pose into an inappropriate bankruptcy charge, simply we hold only the denial of Where the involves the war- improper. ring spouses, however, conversion was We do not and centers around reach what happens to the the division their property, underlying or the when keenly debt courts should possibility assess the convert is deferring after the dis- of to state domestic relations charge. jurisdiction.
m. *4 argues that the by the debtor was filed cannot good faith and that confirmed, 1325(a)(3).3 That U.S.C. § by was not addressed either court or distict court and is HIGGS, Plaintiff-Appellant, Anna L. us. properly before BOWEN, Secretary Department R. Otis IV. Services, of Health and Human For the we AFFIRM Defendant-Appellee. reversing the district court’s order bankruptcy court’s denial of the debtor’s to convert. United States Court of Sixth Circuit. Judge, concurring: Argued Aug. 1988. disagree
I cannot the resolution of by colleagues my this case able Decided Oct. and there- concur, but I must fore observe that this judicial has federal
case consumed re- disproportionate far signifi-
sources to its
cance. This is a domestic relations
masquerading Only as parties spouses —the in —have participated bankruptcy proceedings. alleged
It “creditors” are be-
ing paid off sub rosa the ex-husband.
All of the maneuverings court transpired before property settle-
ment was reached ex-spouses between the Undoubtedly, court. Bankrupt- state permits type written
forum-shopping, but it also a safe-
ty valve federal courts in form abstention, lifting § stay permit
the automatic property dis-
putes proceed initially in the state Not all
courts. divorce proceedings trans- 1325(a)(3) provides: 11 U.S.C. (3) good (a) Except provided (b), by any in subsection faith and not means forbidden law. _ shall confirm a if —