Case Type:
Case Status:
BAP No. CC-21-1178-LTF (9th Circuit, Mar 24,2022) Not Published
The Ninth Circuit Bankruptcy Appellate Panel affirmed the the bankruptcy court's denial of a chapter 7 debtor's motion to convert her case to chapter 13 based on findings that she was ineligible to be a chapter 13 debtor based on her bad faith conduct and a lack of regular income. The BAP held that Marrama v. Citizens Bank of Mass., 549 U.S. 365, 372 (2007), in which the U.S. Supreme Court ruled that a chapter 7 debtor cannot convert to chapter 13 if the debtor has engaged in bad faith or fraudulent conduct, was not overruled by Law v. Siegel, 571 U.S. 415 (2014).
Procedural context:
Pro se debtor had filed a chapter 13 bankruptcy case in May 2019 that was dismissed in October 2019 because she was unable to propose a confirmable plan. Debtor then filed a chapter 7 bankruptcy in March 2021. Debtor amended her schedules multiple times and provided confusing and inconsistent information regarding her income, creditors' claims, and assets. The chapter 7 trustee continued the 341 meeting at least eight times. When the chapter 7 trustee sought to sell her house, debtor sought conversion of the case to chapter 13.
The bankruptcy court made a finding of bad faith based on debtor's motion to convert being filed in response to the trustee seeking to sell the property and claiming that the trustee would not fulfill his duty to obtain appropriate value for the estate, debtor's failure to include any alternative in her proposed chapter 13 plan if she was not able to sell the property, the fact that debtor lacked sufficient income to fund a chapter 13 plan, the insufficiency of a purported $18,000 contribution by debtor's father who was incarcerated, and the varying characterization of the interest held by a family trust. The BAP also upheld the denial based on the independent ground that debtor lacked regular income, as her current income was insufficient to fund a plan and potential funding from family members was uncertain and/or not "regular income."

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3615 in the system

3500 Summarized

0 Being Processed