Opinion
Case No. 99-2627.
January 2000.
SUMMARY ORDER DENYING CREDITOR'S MOTION TO DISMISS
Background and Facts
Risk Management Alternatives, Inc. ("Creditor") moves to dismiss Debtors' Chapter 7 case based upon Section 727(a)(8) of the Bankruptcy Code. Debtors resist dismissal.
The facts are undisputed. On October 8, 1999, Debtors filed a voluntary Chapter 7 petition. Debtors had filed a Chapter 13 petition on September 25, 1991, which was converted to a Chapter 7 case on April 20, 1994. They received a discharge. Creditor now asserts Debtors cannot receive a discharge in this case under the six-year bar of Section 727(a)(8), and therefore cause exists to dismiss. 11 U.S.C. § 707(a). Debtors disagree.
Disposition
Section 727(a)(8) provides that the Court shall grant a discharge unless "the debtor has been granted a discharge under this section . . . in a case commenced within six years before the date of the filing of the petition." 11 U.S.C. § 727(a)(8). Section 348(a) prescribes the effect of conversion:
Conversion of a case from a case under one chapter of this title to a case under another chapter of this title constitutes an order for relief under the chapter to which the case is converted, but, except as provided in subsections (b) and (c) of this section, does not effect a change in the date of the filing of the petition, the commencement of the case, or the order for relief.
11 U.S.C. § 348(a) (emphasis added). "Commencement" of a case occurs upon the filing a voluntary petition. 11 U.S.C. § 301.
Creditor cites Section 348(b) as an exception to Section 348(a), arguing the date of conversion constitutes an "order for relief" and is the relevant date for computing the six years referenced in Section 727(a)(8). By its terms, however, Section 348(b) applies only to the express list of Code sections cited in the subdivision, and Section 727(a)(8) is not one of them. Moreover, the date of the commencement of the case is the relevant inquiry rather than the order for relief. Therefore, Section 348(b) is inapplicable.
The Court finds no case law supporting Creditor's interpretation of Section 727(a)(8). Indeed, several decisions and Collier on Bankruptcy advance the opposite:
The six years begins to run as of the date the first case is "commenced," i.e. the date the petition is filed, and ends as of the date that the subsequent proceeding is begun by the filing of the petition."
6 Collier on Bankruptcy ¶ 727.11[2] (15th Ed. Revised 1999). Accord Resendez v. Lindquist, 691 F.2d 397, 399 (8th Cir. 1982); Riske v. Lyons (In re Lyons), 162 B.R. 242, 233-34 (Bankr.E.D.Mo. 1993); In re Burrell, 148 B.R. 820, 822 (Bankr.E.D.Va. 1992). Creditor's argument that the six-year time period runs from the date of conversion of the prior bankruptcy to the filing of the petition in this bankruptcy case therefore lacks merit. Under Section 727(a)(8), because more than six years had expired between the filing date of Debtors' prior bankruptcy case and the filing date of the second petition, Section 727(a)(8) will not prevent Debtors from obtaining a discharge in this Chapter 7 case. No cause exists for dismissal on this basis.
Even if Creditor was correct and Debtors were not entitled to another discharge, dismissal of this second Chapter 7 case should not automatically result. If dismissal would otherwise prejudice Debtors or creditors, the case could continue. See 6 Collier on Bankruptcy ¶ 727.11[1][a] (15th Ed. Revised 1999).
For the foregoing reasons, Creditor's Motion to Dismiss is hereby DENIED.
IT IS SO ORDERED.