Robert Johnson and Regina J. Johnson

1The Debtors’ plan was confirmed on November 29, 2005. See Docket # 17. The Chapter
13 Trustee filed a Motion to Dismiss on October 6, 2006 (Docket #30), and the Debtors filed a
Notice of Conversion of Case to Chapter 7 Under Section 1307(a) on October 12, 2006 (Docket
# 32).
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: 	ROBERT JOHNSON and 	No. 7-05-15652 MA
REGINA JOHNSON,
Debtors.
ORDER DENYING MOTION TO CONVERT CHAPTER 7 CASE
UNDER SECTION 706
THIS MATTER is before the Court on the Motion to Convert Chapter 7 Case to Chapter
13 Case Under Section 706 (“Motion to Convert”) filed by the Debtors on October 27, 2006
(Docket # 37), by and through their attorneys, Bill Gordon and Associates (Steve Mazer). The
Court held a final hearing on the Motion to Convert on October 23, 2007, and took the matter
under advisement. Debtors filed a voluntary petition under Chapter 13 of the Bankruptcy Code
on July 11, 2005, and, a little over a year later, converted their case to Chapter 7 in response to
the Chapter 13 Trustee’s motion to dismiss for failure to make timely plan payments.1 At issue
is whether the Debtors may now reconvert their bankruptcy proceeding to Chapter 13, more than
one year after they converted their case to Chapter 7, and nearly a year after they filed the
Motion to Convert. This Court finds that they may not.
DISCUSSION
Debtors seek to reconvert their case to Chapter 13 under 11 U.S.C. § 706(a), which
provides:
The debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of
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2Compare In re Hardin, 301 B.R. 298, 300 (Bankr.C.D.Ill. 2003) (holding that the court
has no discretion to allow reconversion under § 706(a), which "gives debtors a right to convert
only if the case has not previously been converted"), and In re Baker, 289 B.R. 764, 768
(Bankr.M.D.Ala. 2003) (finding that the clear language of the statute bars reconversion), and In
re Banks, 252 B.R. 399, 402-403 (Bankr.E.D.Mich. 2000) (holding that § 706(a) bars
reconversion of the case, concluding that “‘a debtor’s right to convert is lost once it has been
exercised.’”)(quoting In re Hanna, 100 B.R. 591, 593 (Bankr.M.D.Fla. 1989)), with In re
Anderson, 354 B.R. 766, 769 (Bankr.D.S.C. 2006) (adopting “the view that a previous
conversion in a case precludes conversion as a matter of right but that a second conversion may
be permitted, after notice and a hearing.”), and In re Manouchehri, 320 B.R. 880, 884
(Bankr.N.D.Ohio 2004)(finding that the court has discretion under § 706(a) to consider whether
case may be reconverted), and In re Johnson, 116 B.R. 224, 227 (Bankr.D.Idaho 1990)(holding
that court has authority to reconvert a case to Chapter 13).
3See Anderson, 354 B.R. at 769 (“The court has discretion to order a second conversion
but should scrutinize the debtor’s circumstances . . . . and address each . . . motion on a case by
case basis.”).
4See Manouchehri, 320 B.R. at 884 (debtor seeking to reconvert, whose good faith has
been questioned, bears the ultimate burden of proof). See also, Johnson, 115 B.R. at 227
(finding that debtors “failed to demonstrate the kinds of facts which would persuade the Court to
exercise its discretion[ ]” to reconvert the debtors’ case to chapter 13.).
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this title at any time, if the case has not been converted under section 1112, 1208, or 1307
of this title. Any waiver of the right to convert a case under this subsection is
unenforceable.
11 U.S.C. § 706(a).
In interpreting this code section, courts are divided on the issue of whether debtors may
reconvert a case to Chapter 13 if the debtors have previously converted their case from Chapter
13 to Chapter 7.2 This Court agrees with those courts which conclude that reconversion is
permitted under 706(a), and that such determination falls within the Court’s discretion.3 The
Debtors bear the burden of showing that reconversion is appropriate. 4 In this case, they have not.
Debtors filed the Motion to Convert on October 27, 2006. (See Docket # 37). They did
not send a notice of deadline to file objections to the Motion to Convert until June 4, 2007. (See
Docket #43). 	Instead, Debtors did nothing to bring the Motion to Convert before the Court and
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5Cf. Manouchehri, 320 B.R. at 885-886 (denying debtor’s request for reconversion when
the facts indicated that the debtor had acted in bad faith during the bankruptcy case by not
cooperating with the trustee). See also, In re Carter, 84 B.R. 744, 747-748 (D.Kan. 1988)
(finding that debtors lost their right to seek conversion to chapter 13 following involuntary
conversion from chapter 11 to chapter 7, but noting that, even if the court were to assume that
the debtors had a discretionary right to seek conversion under § 706(a), the court has “a strict
duty to prevent any use of the Code causing undue delay.”)(citing In re Waldrep, 20 B.R. 248,
250 (Bankr.W.D.Tex.1982)), and In re Green, 169 B.R. 480, 483 (Bankr.D.Ga. 1994) (finding
that debtor who seeks to reconvert case to Chapter 13 must file a new plan that may not exceed
the time limits remaining under original plan).
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have remained in Chapter 7 without having to make any plan payments for over a year.
Apparently, due to the pending Motion to Convert, the Chapter 7 Trustee took no action in this
case. 	Thus the Debtors’ bankruptcy proceeding came to a standstill while, in the meantime, the
Debtors failed to comply with the requirements for proceeding under Chapter 7 or Chapter 13.
This type of delay is prejudicial to creditors and indicates that the Debtors have not proceeded in
good faith.5
WHEREFORE, IT IS HEREBY ORDERED that the Motion to Convert is DENIED.
________________________________________
MARK B. McFEELEY
United States Bankruptcy Judge
COPY TO:
Steve Mazer 	Kelley L. Skehen
Attorney for Debtors 	Chapter 13 Trustee
501 Yale SE Ste 204 	625 Silver Ave. SW, Suite 350
Albuquerque, NM 87106-4357 	Albuquerque, NM 87102
Office of the United States Trustee
PO Box 608
Albuquerque, NM 87103
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