If Chapter 7 is Rejected and Pushed into Chapter 13: Can You Appeal?

[Walter]

I've posted everywhere about my nervousness with this filing, given the DMI listed.

If the trustee rejects the Chapter 7 and pushes the filer into a Chapter 13, can you appeal this motion once?

I am just not sure how it works or how we would handle it.

I just picture us in court, the trustee saying no and pushing the Chapter 13, then do we just walk out with our heads down? Will they ask if this is acceptable? I am just not sure how you handle this when there in person...or is the decision not made in person and you would receive notification in the mail?

So I guess my question(s) isare simply this: 1.) If pushed into a Chapter 13, can you appeal or 2.) If refused the Chapter 7, can you file the paperwork one more time?

If we waited 3 more months for the non-filing spouse's unemployment to run out, they would be way in the red with regards to DMI...but want to file now and hope the Trustee looks at the numbers, realizes that both incomes are 100% exempt, and allow the Chapter 7 based on the means test and not the DMI shown between Schedule's I and J...if that makes sense. ;)

[HHM]

A bankruptcy is still a court proceeding, and it is adversarial in nature. Just like a civil law suit or a criminal prosecution is adversarial in nature.

The trustee is your adversary in bankruptcy, he is NOT the decision maker.

If the trustee thinks your case should be a 13, the trustee will file a Motion to Dismiss or Convert. Note, this does not happen at the 341 meeting. At that point, if you disagree, you WILL NEED to file a written response (Opposition to Trustees Motion to Dismiss or Convert). A hearing will be scheduled and you will go before the judge. Depending on the issue, you may simply argue a legal point, or if there are facts in dispute, you will need to admit and present evidence.

If the judge rules in favor of the trustee, then you have the option to appeal.

[BkJay]

I'm a little curious also about this. Would the trustee file the dismissal or conversion prior to the 341 or after?

[justbroke]

The timing of the Motion to Dismiss of Convert is usually after the 341 Meeting. It is not the Panel Trustee who makes these motions, it's the United States Trustee (UST). Nothing would prevent the UST to move for dismissal or conversion before the 341 Meeting, but much of the timing is really related to the fact that they are real busy and don't really look at a case until about the time of the 341 Meeting.

[HHM]

I'm a little curious also about this. Would the trustee file the dismissal or conversion prior to the 341 or after?

Usually after. No one really looks at a BK case until after the 341 meeting (why waste the time, if the debtor does not show to the 341, the case is usually dismissed).

[Walter]

Thanks, HHM...exactly the information I was looking for.

After redoing Schedule J, I have them now down to $398 in DMI, so though this is still high, I am hoping it flies, given the nature of the filing (100% of their income is exempt, medial situation, unemployment compensation ending just months away, etc,etc).

I was hoping that you received the notice, or as you called it the "Motion to Dismiss or Convert", sometime down the road and not during the 341...so thanks for clearing this up, too!

If the Trustee doesn't support the Chapter 7 due to the DMI, then hopefully we can delay (30-60 days?) the written opposition for a month or two, at which point the non-filing spouse's unemployment compenation will be exhausted and DMI drops by $1,200/month.

Many, many, many thanks for the information.