Opinion
Case No. 8:16-bk-07798-RCT
12-12-2016
In re Amadou Wane, Debtor.
Chapter 13 ORDER GRANTING MOTION TO DISMISS CASE AND PROVIDING LEAVE TO CONVERT
This chapter 13 case was considered on the Motion to Dismiss Case and Objection to Proposed Plan filed by Bank United, N.A. ("Bank United") (Doc. 33) (the "Motion"), and the Debtor's Response (Doc. 36). At the hearing on the Motion, the parties were invited to submit supplemental authorities before December 9, 2016. Only Bank United accepted this invitation. (Doc. 45).
The issue is whether Amadou Wane is eligible for chapter 13 relief under 11 U.S.C. § 109(e). Bank United argues that Mr. Wane is not eligible because his unsecured debt exceeds the statutory limits for chapter 13. Mr. Wane responds that because he intends to surrender certain collateral, the debts associated with that collateral should be excluded when evaluating his eligibility for chapter 13. Mr. Wane adds that even if he is not eligible for chapter 13, the proper remedy is to convert his case to chapter 11 under § 1307(d).
Statutory references are to 11 U.S.C. §§ 101-1532 ("Bankruptcy Code" or "Code"), unless otherwise indicated.
Bank United initially argued Debtor was over both the unsecured and secured debt limits. However, in its supplemental memorandum, it recognized its argument as to the secured debt was based upon a mistake of fact as to the applicable secured debt limit. (Doc. 45, n.1).
Mr. Wane's bankruptcy schedules show that his unsecured obligations exceed the debt limits to qualify for chapter 13 relief. Hence, he is not eligible to proceed in chapter 13. His desire to surrender collateral does not change this result because his debts are measured as of the date that he filed his chapter 13 petition. See § 109(e) (providing that debts are measured as of "the date of the filing of the petition"); In re De La Hoz, 451 B.R. 192 (Bankr. M.D. Fla. 2011); see also Smith v. Rojas (In re Smith), 435 B.R. 637 (B.A.P. 9th Cir. 2010); Vaughan v. Cent. Bank of the S. (In re Vaughan), 36 B.R. 935 (N.D. Ala.), aff'd, 741 F.2d 1383 (11th Cir. 1984).
Reviewing Debtor's schedules and including the unsecured portion of Debtor's under secured debt as required, Debtor owed—as of the date of the petition—unsecured debts of $477,256, well above the $394,725 limit. --------
Although Mr. Wane has too much unsecured debt to remain in chapter 13, he will have the opportunity to convert his case to chapter 11 or chapter 7.
Accordingly, it is ORDERED:
1. The Motion is GRANTED.
2. This chapter 13 case is DISMISSED; however, Mr. Wane is GRANTED leave to convert his bankruptcy case to chapter 11 or chapter 7 by filing notice of such conversion within 14 days from entry of this Order.
ORDERED. Dated: December 12, 2016
/s/_________
Roberta A. Colton
United States Bankruptcy Judge Attorney Richard Danese is directed to serve a copy of this order on interested parties and file a proof of service within 3 days of entry of the order.