In re Farnham (23-30610-AEC)

The question presented in this case is whether a debtor has an absolute right to dismiss a chapter 13 case under § 1307(b), provided the case has not been converted previously, or whether the court may deny a debtor’s request to dismiss a chapter 13 case for cause. 

On the Debtor’s request, the Court dismissed the chapter 13 case while a motion to convert, filed by a group of creditors, was pending.  The creditors requested the Court set aside its order dismissing the case, arguing that the Debtor did not have the right to dismiss his case without creditors being afforded the opportunity to oppose the dismissal by arguing what they contended is the Debtor’s bad faith, misconduct, and ineligibility for chapter 13 relief.

The Court ruled in favor of the Debtor, finding the language of 11 U.S.C. § 1307(b) unambiguous, and holding that a debtor has an absolute right to voluntarily dismiss a chapter 13 case provided the case was not previously converted under §§ 706, 1112, or 1208.  Accordingly, the Court sided with the majority position after evaluating both majority and minority approaches connected to § 1307(b).

 

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Date: 
Friday, September 6, 2024