Ducking the question of whether a previously converted case can be reconverted to chapter 13, Bankruptcy Judge Robert H. Jacobvitz of Albuquerque, N.M., allowed the debtor to reconvert and complete payments under a previously confirmed plan.
The debtor had paid 54 of the 58 monthly payments required under his confirmed chapter 13 plan, totaling $54,000. With only $5,200 remaining to be paid under the plan, the debtor voluntarily converted the case to chapter 7. Having second thoughts, he filed a motion two months later for reconversion to chapter 13 and simultaneously deposited the remaining $5,200 with the court.
Only the chapter 13 trustee objected to reconversion. The trustee did not contend that the debtor was barred from reconverting; the trustee only argued that the debtor had to start over with a new plan.
Judge Jacobvitz disagreed, allowing the debtor to reconvert in his March 31 opinion. Because no one objected to reconversion, he did not reach a question that has divided lower courts: In view of Section 706(a), does a debtor even have a right to reconvert if the debtor’s case was already converted from chapter 13 to chapter 7?
Only addressing whether the prior plan became a “nullity,” Judge Jacobvitz said that nothing in Section 348(e) “expressly nullifies or voids a confirmation order.” Citing the Supreme Court’s Harris v. Viegelahn decision, he said that the “statutory provisions under chapter 13 simply no longer apply” upon conversion to chapter 7.
Once the case was converted to chapter 7, creditors could no longer enforce the plan, but “the plan and the order confirming the plan nevertheless still exist[ed],” he said. When the case was reconverted, creditors were once again bound by the plan by Section 1327(a), the judge held.
In addition to sidestepping what he called the “more problematic” question of whether Section 706(a) bars reconversion, Judge Jacobvitz ended the opinion by saying that his decision was “narrow and unique to the debtor’s particular circumstances.”