[CLBS] Reconversion

Wed Sep 17 10:55:12 MDT 2014

Interesting points there.  348(a) provides that conversion does not change the date of the filing of the petition, the commencement of the case or the order for relief.  There are no exceptions that I see in the rest of 348 that impacts the requirements for confirmation of ch 13.

To confirm you have to satisfy 1325.  If you face an objection for the Trustee or a creditor, and are not paying creditors in full, as of the effective date of the plan, the plan must provide for payment of all of the projected disposable income  to be received in the applicable commitment period beginning on the date that the first plan payment is due to make payments to unsecured creditors under the plan.  1325(b)(1)(B).  

A debtor has to propose a plan that is at least as long as the minimum applicable commitment period, and make payments of projected disposable income for not less than the applicable commitment period, as I understand this.  The Ninth Circuit recently addressed much of this in Flores, 735 F3d 855 (9th Cir. 2013).   If you convert 12 months after the petition was originally filed, and after months of being in a ch 7 after an initial conversion, can you satisfy this requirement?  Is it enough to reconvert, propose a plan that has payments of zero dollars  per month during the time in ch 7, and payments sufficient to pay the projected disposable income, during the rest of the term of the plan for the remainder of the applicable commitment period?  If the debtor has little or no projected disposable income and is willing to make whatever sacrifices are necessary to make up any payments that would have been paid as projected disposable income during the period in ch 7, maybe a debtor can satisfy those requirements.

This analysis may be complicated by the analysis in Hamilton v Lanning, U S Sup Ct decision from 2010.  There, the Sups said projected disposable income may be adjusted for changes that are reasonably certain to occur.  "we hold that when a bankruptcy court calculates a debtor's projected disposable income, the court may account for changes in the debtor's income or expenses that are known or virtually certain at the time of confirmation."  If that is so, does that mean that any changes that a debtor makes to be able to pay the amounts that might have been due during the time when no payments were made, during the period of the conversion to ch 7, increases projected disposable income so that it must be paid going forward and cannot be used to satisfy any amounts that should have been paid while in the ch 7?

How does this impact the right to convert from ch 7 under 706?  706(a) allows a conversion as a matter of right if a  case has not previously been converted under 1112, 1208 or 1307.  I do not think that 706 has been interpreted as prohibiting  a conversion to another chapter if there had previously been a conversion form another chapter.  How would a court interpret any argument that essentially prohibited a conversion for ch 7 to ch 13, whether on a  reconversion or not, if the analysis essentially made 706 totally ineffective?

This would be a great issue to litigate.  Or to make a presentation on at the annual seminar.

Randy French
www.bauerandfrench.com

Bauer & French
Attorneys at Law
1501 Tyrell Lane 1P.O. Box 2730 PBoise, ID 83701-2730
(208) 383-0090 ( Fax: (208) 383-0412
IMPORTANT NOTICE: This communication, including any attachments, may contain information that may be confidential or privileged and is intended solely for the entity or individual to whom it is addressed. If you are NOT the intended recipient, you must delete this message and attachments and are hereby notified that any disclosure, copying, or distribution of this message is strictly prohibited. Nothing in this email, including any attachment, is to be a legally binding signature.

-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Alexandra Caval
Sent: Wednesday, September 17, 2014 10:08 AM
To: Tyler S. Wirick; BK listserve
Subject: Re: [CLBS] Reconversion

Legally I think you're facing the good faith standard on the reconversion but practically speaking you're going to have difficulty catching up the missed payments while the case was a Chapter 7 because your plan term does not start over on the reconversion back to chapter 13. You would be better off to dismiss and refile the case as a chapter 13. I don't think I've seen a successful reconversion back to a 13 in the last four years.

Alexandra O. Caval
Staff Attorney
Office of Kathleen A. McCallister
Chapter 13 Trustee
P.O. Box 1150
Meridian, ID 83680
T: 208-922-5100
F: 208-922-5599

-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Tyler S. Wirick
Sent: Tuesday, September 16, 2014 5:10 PM
To: BK listserve
Subject: [CLBS] Reconversion

Anyone had any experience with representing a debtor in a reconversion of a case from Chapter 7 to Chapter 13 and would be willing to give me some guidance?

Best regards,

Tyler S. Wirick
Law Offices of Tyler S. Wirick
250 Northwest Blvd. Suite 107A
Coeur d'Alene, Idaho 83814
Telephone: (208) 292-4200
Fax: (208) 292-4201
tyler.wirick at wiricklaw.com

******NOTICE******

The information transmitted in this email and any attachments is intended only for the personal and confidential use of the intended recipients. This message may be or may contain privileged and confidential communications. If you as the reader are not the intended recipient, you are hereby notified that you have received this communication in error and that any retention, review, use, dissemination, distribution or copying of this communication or the information contained is strictly prohibited. If you have received this communication in error, please notify the sender immediately and delete the original message from your system.

_______________________________________________
CLBS mailing list
CLBS at admws.idaho.gov
http://admws.idaho.gov/mailman/listinfo/clbs
_______________________________________________
CLBS mailing list
CLBS at admws.idaho.gov
http://admws.idaho.gov/mailman/listinfo/clbs

!SIG:5419b1d245691672912654!