Case Type:
Case Status:
No. 18-3000 (3rd Circuit, Dec 17,2018) Not Published
The Third Circuit Court of Appeals affirmed the conversion of Debtor's Chapter 13 case to a Chapter 7 case. The Debtor debts exceeded the amounts set forth in 11 U.S.C. § 109(e). The Debtor did not preserve any issues for appeal because the Debtor failed to attend the hearing on the motion to convert.
Procedural context:
Debtor failed to appear at the hearing on the motion to convert her case from Chapter 13 to Chapter 7. The Bankruptcy Court converted the case and Debtor appealed to the New Jersey District Court. The District Court affirmed the Bankruptcy Court's decision.
Debtor filed her first Chapter 13 bankruptcy case, which stayed on a foreclosure action on her home. The case was subsequently dismissed because the Chapter 13 plan was not feasible. The foreclosure proceeding continued in New Jersey state courts and the creditor obtained a final judgment of foreclosure. Days before the scheduled sale, Debtor's husband filed a Chapter 13 case. The creditor obtained relief from the automatic stay and rescheduled the foreclosure sale. Two hours before the rescheduled foreclosure sale, Debtor filed her second Chapter 13 petition pro se. The creditor filed a motion to convert to a Chapter 7 case because (i) the case was filed in bad faith and (ii) the Debtor was not eligible because her debts exceeded the amounts set forth in 11 U.S.C. § 109(e). The Debtor did not appear at the hearing on the motion to convert. The Bankruptcy Court denied the request to convert on the basis of bad faith, but determined that the Debtor was ineligible under 11 U.S.C. § 109(e) and converted the case on that basis. The Debtor had debt of more than $500,000 secured by her home, plus a securities fraud judgment of $809,000, which might have been a secured or unsecured debt. Either way, her debt exceeded either the limit on secured debt or the limit on unsecured debt. The Chapter 7 trustee subsequently sold the house while the appeal was pending.

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