- Case Type:
- Case Status:
- No. 16-11506; D.C. Docket Nos. 1:15-cv-20376-JEM; 11-bkc-16703-LMI (11th Circuit, Jun 27,2017) Published
- In affirming the district court and bankruptcy court, the 11th Circuit held that 11 U.S.C. 707(b) applies to a petition that was initially filed under Chapter 13 but later converted to a petition under Chapter 7. The Court noted that Congress intended 707(b) to be a tool for bankruptcy courts to expeditiously dismiss Chapter 7 petitions filed by debtors with sufficient income to pay their creditors and that this goal would be eviscerated if the Court were to adopt the debtor's position as it would allow a debtor to file a Chapter 13 petition and convert to Chapter 7 the following day.
- Procedural context:
- The Bankruptcy Court for the Southern District of Florida held that 11 U.S.C. 707(b) applies to a petition that was initially filed under Chapter 13 but later converted to a petition under Chapter 7. The United States District Court for the Southern District of Florida affirmed. The debtor appealed to the 11th Circuit.
- The facts are simple. The debtor filed a petition for relief under Chapter 13 of the Bankruptcy Code. He submitted a Chapter 13 Plan and made the required payments for more than 2 years. He then converted his case to a Chapter 7. The U.S. Trustee moved to dismiss the bankruptcy case as abusive under 11 U.S.C. 707(b), contending that the debtor's disposable income, which far exceeded the means-test, would allow for a significant dividend to unsecured creditors. The debtor opposed dismissal on the sole ground that 707(b) does not apply to petitions initially filed under Chapter 13 and later converted to Chapter 7. The debtor conceded that his petition fails to satisfy the means-test and that his petition would be subject to dismissal as an abusive petition if 707(b) applied.
- Carnes, Anderson, and Parker
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