By: Armando Nozzolillo and Michael S. Waskiewicz

In the last 2 years, three judges of the Middle District of Florida (Judges Funk, Delano and Williamson) have each issued opinions finding 11 U.S.C. § 707(b)(2) inapplicable in cases converted from a Chapter 13 to a Chapter 7. These Courts have based their findings on the “plain language” of the provision.

11 U.S.C. § 707(b)(1) generally provides that a Court may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts if the Court finds that granting relief would constitute an abuse of the Bankruptcy Code. 11 U.S.C. § 707(b)(2) generally provides that a Court shall presume that a Chapter 7 case is abusive if the debtor’s current monthly income, when reduced by expenses or payments determined under the provision, is greater than a specified threshold amount set forth therein. The above-referenced judges all held § 707(b) is inapplicable to converted cases because the cases are converted to a Chapter 7 from another chapter, and thus, are not originally filed under Chapter 7. 

However, in a recent decision from the Middle District Bankruptcy Court, Judge Glenn has created an intra-district split on the issue. In Summerville [1] , a Chapter 13 debtor whose case had recently been dismissed for failure to make payments filed a notice converting her Chapter 13 case to a Chapter 7. The United States Trustee filed a motion seeking dismissal of the debtor’s case pursuant to § 707(b)(1).