Court Allowed Debtors to Convert Case to Chapter 13 in order to Sell Their Home, Over Objections from the IRS and Trustee

Court Allowed Debtors to Convert Case to Chapter 13 in order to Sell Their Home, Over Objections from the IRS and Trustee

Debtors moved to convert their Chapter 7 case to a case under Chapter 13 in order to sell their home. The Chapter 7 trustee and the IRS objected to the Motion to Convert.

The trustee noted that under Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365, 374 (2007), a debtor’s right to convert from Chapter 7 to Chapter 13 is not absolute.

The trustee’s opposition accuses the debtors of moving to convert, not with the intention
to successfully complete a chapter 13 plan (as their income and expenses as currently set forth
in their schedules do not support a viable plan), but with the improper motive of frustrating the
trustee’s efforts to sell their home in order to pay off the existing mortgage debt and partially
pay tax lien creditors.

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