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CONVERSIONS

 

 


FROM CHAPTER 7 TO CHAPTER 13


FROM CHAPTER 13 TO CHAPTER 7

Harker v. U.S.A. (Internal Revenue Service), (8th Cir. 1998) unpublished appeal from the United States District Court for the Southern District of Iowa. http://www.wulaw.wustl.edu/8th.cir/Opinions/970425/963620.U8

The appellate court affirmed the decision of the district court and the bankruptcy court to convert the debtor's chapter 13 petition to a chapter 7 proceeding. Following a hearing the bankruptcy court found that Harker filed his Chapter 13 petition "as a litigation tactic to avoid posting an appeal bond to postpone assessment by the IRS; that the IRS was his only unsecured creditors; and that the debt to the IRS was a potentially nondischargeable, priority claim. Such bad faith efforts warranted a conversion of the debtor's case to chapter 7.

Molitor v. Eidson, 76 F.3rd 218 (8th Cir. 1996). http://www.wulaw.wustl.edu/8th.cir/Opinions/960209/951180.P8

Amid allegations of multiple filings (3), bad faith, and improper listing of liabilities on the schedules, the bankruptcy court refused to allow the debtor to use 11 U.S.C. 1307(c) as an escape hatch by voluntarily dismissing his case in response to a motion to convert. No showing of fraud is required to convert a case under Chapter 13. A Chapter 13 petition filed in bad faith may be dismissed or converted "for cause" under 11 U.S.C. 1307(c).

Rudd v. Laughlin, 866 F.2d 981 (8th Cir. 1989).

Debtors filed sixth (6th) chapter 13 petition within a four year period. Chapter 13 Trustee moved to convert the case to a chapter 7 proceeding rather than dismissing it because the debtors repeatedly dismissed and refiled. The debtors' ineligibility for chapter 13 relief did not deprive the bankruptcy court of jurisdiction to convert debtors' chapter 13 case to case under chapter 7. This case effectively reversed In Re Wulf, 62 B.R. 155 (Bankr. D. Neb. 1986).

Ladika v. Internal Revenue Serv. (In Re Ladika), 215 B.R. 720 (B.A. P. 8th Cir. 1998) (Chief Judge Koger) (before Koger, Kressel, and Schermer)

http://ls.wustl.edu/8th.cir/Opinions/BAP/980130/976084.P8

Cause for conversion of a chapter 13 case to a chapter 7 case was found to exist where a tax protestor's chapter 13 case filed in bad faith as part of a scheme to avoid paying the Internal Revenue Service.


FROM CHAPTER 7 TO CHAPTER 13 TO CHAPTER 7

Zepecki v. Bonnie L. Harlan & David D. Coop, Chapter 13 Trustee, unpublished decision, filed March 30, 1998.

http://www.wulaw.wustl.edu/8th.cir/Opinions/980330/972184.U8

Appellate court affirmed the district court's affirmance of the bankruptcy court's conversion of debtor's chapter 13 bankruptcy case back to a chapter 7 proceeding from which he had previously converted. Debtor's actions to hide a real estate transaction and disposal of asset proceeds during a chapter 7 meeting of creditors supported bankruptcy court's decision.


FROM CHAPTER 13 TO CHAPTER 7 TO CHAPTER 13

In Re Anderson, Bk. No. 95-81832

http://www.nebar.com/bankruptcy/Anderson.htm

Debtor obtained a confirmed chapter 13 plan and had been paying on a secured car loan with interest through the chapter 13 trustee's office. This loan was co-signed by the debtor's mother, and the credit union had never resisted confirmation. There was a disputed conversation between the debtor and a credit union official, and debtor had the impression that if he converted his case to a chapter 7, that he would have to pay less on the credit union loan. He converted his case to a chapter 7, and immediately or shortly thereafter, the credit union brought suit against the debtor's mother on the cosigned loan. Debtor filed a motion to reconvert the case to chapter 13, and the credit union resisted the conversion back to the chapter 13.

The Bankruptcy Court reviewed the relevant statutory section, 11 U.S.C. 706(a), and determined that the statute limited the ability of the debtor to convert under these circumstances. However, the Court granted the debtor's motion to convert the debtor obviously made a mistake and misunderstood and the credit union would have received a windfall. The Court reasoned that the conversion back to chapter 13 would put the parties in the same position they had been before the misunderstanding.


FROM CHAPTER 11 TO CHAPTER 13


FROM CHAPTER 13 TO CHAPTER 11

 

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