See In re Starkey, 179 B.R. 687 (Bankr.N.D.Okla. 1995); In re Jeffrey, 176 B.R. 4 (Bankr. D.Mass. 1994). The Trustee contends that the Debtors have engaged in activities that warrant denial of their conversion request.
The Court notes that Debtors proceeded pro se under Chapter 7 and, while this does not, by itself, excuse the oversight, it does suggest that it was innocent. Trustee cites In re Baber, 57 B.R. 597 (Bankr.W.D.Va. 1986), and In re Jeffrey, 176 B.R. 4 (Bankr.D.Mass. 1994), for the proposition that a debtor may only convert a case from Chapter 7 to Chapter 13 in good faith with the sincere intention of putting forth a meaningful plan. However, this Court has previously held that ยง 706(a) gives a debtor a one-time absolute right to convert a case from Chapter 7 to Chapter 13. See In re Sobin, 99 B.R. 483, 484 (Bankr.M.D.Fla. 1989); In re Hanna, 100 B.R. 591, 593 (Bankr.M.D.Fla. 1989).
1999); In re Widdicombe. 269 B.R. 803 (Bankr.W.D.Ark. 2001); In re Johnson, 262 B.R. 75 (Bankr.E.D.Ark. 2001);In re Porter. 276 B.R. 32 (Bankr.D.Mass. 2002); In re Jeffrey. 176 B.R. 4 (Bankr.D.Mass. 1994); In re Young. 269 B.R. 816 (Bankr.W.D.Mo. 2001); In re Thorton, 203 B.R. 648 (Bankr.S.D.Ohio 1996); In re Spencer. 137 B.R. 506 (Bankr.N.D.Okla.
Another argument against conversion after discharge is that conversion would upset the "quid pro quo" of Chapter 7 bankruptcy. In re Jeffrey, 176 B.R. 4, 6 (Bankr. D. Mass. 1994).
When a case is converted to Chapter 13 before liquidation, the Chapter 7 estate ceases to exist and becomes instead, the debtor's property in Chapter 13. When a debtor converts to Chapter 13 after the Chapter 7 discharge, but before the estate property is liquidated, he has received all of the benefits of Chapter 7 without any of the burdens, because he regains his nonexempt property, and his debts have all been discharged. In re Jeffrey, 176 B.R. 4, 6 (Bankr.D.Mass. 1994). Commencing a new case under Chapter 13, after a Chapter 7 case, is vastly different from a conversion to a Chapter 13.
In re Marcakis , 254 B.R. at 82-83 ; In re Lesniak , 208 B.R. 902 (Bankr. N.D. Ill. 1997) ; In re Schwartz , 178 B.R. 340, 345 (Bankr. E.D. N.Y. 1995) ; In re Jeffrey , 176 B.R. 4 (Bankr. D. Mass 1994). However, as noted by the court in Carrow , "[t]he problem with this line of authority with all due respect, is that the courts have reached a conclusion of law that is based more on citation to each other's decisions than on any critical analysis of the Code, the Rules, or existing case law."
Bad faith is often found in cases where the debtor fraudulently fails to disclose assets. See Marrama, 127 S. Ct. 1105; Marcakis, 254 B.R. 77; In re Jeffrey, 176 B.R. 4 (Bankr. D. Mass. 1994). Here, the debtor listed his cooperative apartment in both the Chapter 7 and Chapter 13 petitions, and there has been no allegation that the debtor has attempted to hide any assets.
Krishnaya, 263 B.R. at 65 (citing H.Rep. No. 95-595, 95th Cong., 1st Sess., 380 (1978), U.S. Code Cong. Admin. News 1978, pp. 5963, 6336; S.Rep. No. 95-989, 95th Cong., 2nd Sess., 94 (1978), U.S. Code Cong. Admin. News 1978, pp. 5787, 5880). Although this court otherwise tends to agree with those cases holding that conversion might nevertheless be denied under "extreme circumstances," such as a debtor's abuse of process, In re Jeffrey, 176 B.R. 4, 6 (Bankr.D.Mass. 1994); but see Widdicombe, 269 B.R. at 807 (rejecting what court calls minority view that "extreme circumstances" may appropriately be considered in converting a case on the debtor's request under ยง 706(a)), the court is not called upon to decide that question here in any event. In canvassing those cases, it is apparent that this case lacks the kinds of aggravated circumstances that tend to result in a refusal to convert on grounds other than debtor eligibility for relief under the chosen chapter of the Bankruptcy Code or a prior conversion. Indeed, the facts of this case appear common: Debtor's sudden epiphany and desire to repay her creditors, prompted by the discovery of substantial equity in Debtor's property and the Chapter 7 Trustee's resulting push to liquidate that equity for the benefit of creditors, as he unquestionably must do if he is doing his job. See, e.g., Carter, 285 B.R. at 62 (debtor's "notice" of conversion filed in response to Chapter 7 trustee's motion to sell debtor'
Id. at 84. The first argument addressed by the Mosby court as to why a discharged debtor could not proceed in Chapter 13 was that proposed by Judge Carol Kenner in In re Jeffrey, 176 B.R. 4, 6 (Bankr.D.Mass. 1994). Id. at 85.
A Chapter 7 case involves a quid pro quo: debtors receive a discharge and, in exchange, make full disclosure about their financial affairs, especially their assets, and surrender their nonexempt assets to the trustee for liquidation and distribution among creditors.In re Jeffrey, 176 B.R. 4, 6 (Bankr.D.Mass 1994). B. The statutory framework underlying the bankruptcy bargain