Fokkena v. Chapman (In re Chapman)
- Citation:
- No. 10-6046 (8th Cir. BAP, March 11, 2011)
- Tag(s):
-
- Ruling:
- The 8th Circuit BAP held that 11 U.S.C. 707(b)(1) of the Bankruptcy Code (the "Code") applies to Chapter 7 cases that have been converted from Chapter 13, thus permitting the Chapter 7 trustee to seek dismissal for abuse under Sections 707(b)(2) and (3).
- Procedural context:
- The bankruptcy courts for the District of Minnesota and the Southern District of Iowa denied the respective trustee's respective motions to dismiss pursuant to the abuse standards of Sections 707(b)(2) and (3). The BAP reversed both decisions and remanded to the bankruptcy courts for determination of dismissal under those sections.
- Facts:
- The debtors filed petitons for relief under Chapter 13. Their financial circumstances subsequently changed, causing them to convert their cases to Chapter 7. The trustee moved to dismiss the cases under Section 707(b) for abuse, relying upon Sections 707(b)(2) and (3). The court noted that Secion 707(b)(1) sets forth the general rule that the court may dismiss or convert (with the debtor's consent) certain cases if it determines that the granting of relief would be abusive. The court's determination of abuse may be made under either of the standards set forth in Sections 707(b)(2) and (3). The court noted that whether the case was originally filed under Chapter 7 or converted to Chapter 7 was not relevant under Eighth Circuit authority. Specifically, the court found it was compelled under the Eighth Circuit's decision in Resendez v. Lindquist, 691 F.2d 397 (8th Cir. 1982) to determine that such converted cases are considered to be "filed" under Chapter 7 for purposes of Section 707(b)(1). Renendez states that "[i]t is also established that when there is a conversion, the debtors are deemed to have filed a Chapter 7 case at the time the Chapter 13 is filed."
- Judge(s):
- Schermer, Saladino, and Nail.
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