§ 142.1 — New Schedules, Statement, Meeting of Creditors and Deadlines
Revised: June 10, 2004
After conversion, the debtor must file some new documents in the Chapter 7 case and appear at another meeting of creditors. Bankruptcy Rule 1019(1)(A) provides that the lists, schedules and statement filed in the Chapter 13 case are deemed filed in the Chapter 7 case unless the court directs otherwise.1 Local practice varies whether a new statement and schedules must be filed in the Chapter 7 case. In the absence of court order or local rule, new schedules and statement of affairs are not required.2 There are good reasons why most debtors should not file a new exemption schedule (Schedule C to Official Bankruptcy Form 6)3 at conversion to Chapter 7.4
If a statement of intention is required consistent with § 521(2), the statement must be filed within 30 days after conversion or before the first date set for the meeting of creditors in the Chapter 7 case, whichever is earlier.5 Bankruptcy Rule 1019(1)(B) requires that any motion for extension of time to file a statement of intention after conversion must be filed before the original time expires. It has been held that a debtor’s failure to file the statement of intention after conversion from Chapter 13 to Chapter 7 does not always preclude redemption during the Chapter 7 case.6
Bankruptcy Rule 2002(f) requires notice of conversion to all creditors. The Rule requires notice of voluntary conversion under § 1307(a) though no order of conversion will be entered under Bankruptcy Rule 1017(f)(3).7 The Bankruptcy Rules assign responsibility to give notice of conversion to “the clerk, or some other person as the court may direct.”8 The debtor is vitally interested that notice of conversion is indeed given to all creditors. Conversion from Chapter 13 to Chapter 7 commences new time periods for creditors to object to discharge or to the dischargeability of debt.9 It has been held that a creditor without notice of conversion from Chapter 13 to Chapter 7 cannot be time barred to file a complaint to determine the dischargeability of a fraud claim.10
Within 15 days after the order of conversion,11 the debtor must file a schedule of unpaid debts incurred after commencement of the Chapter 13 case.12 The form of this schedule is not specified, but it must include “the name and address of each holder of a claim.”13
If conversion occurs after confirmation, the debtor must also file (no 15-day limitation) a schedule of unpaid debts incurred after confirmation (if not listed in the trustee’s final report), and a schedule of executory contracts entered into or assumed during the superseded Chapter 13 case.14 If the Chapter 13 case was converted by the debtor after confirmation in bad faith under § 348(f)(2),15 the debtor must also file a schedule of property not listed in the final report of the trustee that was acquired by the debtor after the filing of the petition but before conversion.16
The schedule of unpaid debts incurred after commencement of the Chapter 13 case required by Rule 1019(5)(B)(i) and the schedule of unpaid debts incurred after confirmation required by Rule 1019(5)(C)(ii) will almost assuredly overlap. It is not obvious why Rule 1019(5)(B)(i) requires the names and addresses of each holder of an unpaid debt incurred after the filing of the petition but Rule 1019(5)(C)(ii) does not require names and addresses of unpaid debts not listed in the final report of the trustee and incurred after confirmation. Filing the schedule of unpaid debts incurred after the petition, including names and addresses, as required by Rule 1019(5)(B)(i) should also satisfy the requirement in Rule 1019(5)(C)(ii) that the debtor file a schedule of unpaid debts not listed in the final report and incurred after confirmation. Why the new schedule of property is required after bad-faith conversion only in cases converted after confirmation is anybody’s guess.
Under Bankruptcy Rule 1019(6) after the schedule of unpaid debts incurred before conversion is filed, the clerk, or some other person directed by the court, “shall give notice to those entities listed on the schedule of the time for filing a request for payment of an administrative expense and . . . the time for filing a claim of a kind specified in § 348(d).”17 Section 348(d) addresses claims against the Chapter 13 estate or against the debtor that arose during the Chapter 13 case before conversion.18 The debtor should be prompted to put some care into preparing the schedule of unpaid debts incurred during the Chapter 13 case to ensure that all potentially dischargeable creditors get notice.
In Chapter 13 cases filed after October 22, 1994, the 1994 Act affects the content and importance of the new documents filed after conversion. The 1994 Act amended § 348(f) of the Code to redefine property of the estate at a good-faith conversion from Chapter 13 to “consist of property of the estate, as of the date of the filing of the petition, that remains in the possession of or is under the control of the debtor on the date of conversion.”19 Also, valuations of property and of allowed secured claims in the Chapter 13 case “shall apply in the converted case, with allowed secured claims reduced to the extent that they have been paid in accordance with the Chapter 13 plan.”20
These changes to § 348(f) will render the original statement and schedules inaccurate in many cases filed after October 22, 1994, that convert to Chapter 7. The passage of time will change the property of the estate that remains in the possession or control of the Chapter 13 debtor. The values and amounts of allowed secured claims that are ultimately determined during the Chapter 13 case often are not the same as the values and amounts of claims stated by the debtor in the original schedules and statement. If a Chapter 13 plan was confirmed, payments will reduce the allowed amounts of secured claims, and those balances are binding on secured claim holders at conversion under § 348(f)(1)(B).
At conversion to Chapter 7, the services of the Chapter 13 trustee are automatically terminated,21 and the Chapter 13 trustee is required to file a final report and account.22 The debtor and counsel should review the final report to make sure it is accurate of payments during the Chapter 13 case and of the reduced balances on secured claims passing into the Chapter 7 case. If the status or amount of claims changed during the Chapter 13 case in ways not reflected on the trustee’s final report, the debtor should file new schedules to reflect the changes and may have to object to the trustee’s final report. If the debtor intends to redeem property under § 722 after conversion, the debtor will want to assert values and reduced allowed secured claims consistent with § 348(f). Debtors should not file a new Schedule C, Property Claimed as Exempt, if the period for objecting to exemptions under Bankruptcy Rule 4003(b) expired during the Chapter 13 case and the debtor does not need to charge the exemptions previously claimed.23
Under 11 U.S.C. § 348, for many purposes conversion from Chapter 13 to Chapter 7 does not change the date of the filing of the petition.24 For example, conversion to Chapter 7 does not alter the original counting periods for avoidance actions under § 546(a)—if the limitation period expired during the Chapter 13 case, conversion to Chapter 7 does not revive avoidance actions that could have been brought during the Chapter 13 case.25 Conversion to Chapter 7 does not subject the debtor to new filing fees or miscellaneous fees enacted after the Chapter 13 petition.26 The date of the order for relief is shifted to the date of conversion for purposes of discharge in the Chapter 7 case.27 It has been held that misconduct during the Chapter 13 portion of a case can be a ground for denial of discharge after conversion to Chapter 7.28
Proofs of claim actually filed by a creditor during the Chapter 13 case are “deemed filed” in the Chapter 7 case after conversion and need not be refiled unless the creditor believes there has been a material change in the status or amount of its claim that is not reflected in the trustee’s final report and account.29 For example, a tax claimant with a statutory entitlement to interest that was not allowable during the Chapter 13 case30 might file a new or amended31 proof of claim after conversion to add the accumulated interest that was in suspension during the Chapter 13 case.32 The Bankruptcy Rules are silent whether a proof of claim filed by the debtor or trustee under Rule 3004 is “deemed filed” after conversion to Chapter 7.33 Notwithstanding automatic termination of the services of the Chapter 13 trustee at conversion under § 348(e), it has been held that the Chapter 13 trustee has standing to object to claims after conversion to Chapter 7 to complete the distribution of funds on hand.34
Bankruptcy Rule 1019(2) provides that conversion from Chapter 13 to Chapter 7 commences new time periods for filing claims, for filing complaints objecting to discharge and for filing complaints to determine the dischargeability of any debt, unless the case was previously converted from Chapter 7 and the applicable time periods expired in the original Chapter 7 case.35
Section 341 of the Code contemplates a meeting of creditors “within a reasonable time after the order for relief in a case under this title.”36 Under § 348(a), conversion of a case from Chapter 13 to Chapter 7 “constitutes an order for relief under the chapter to which the case is converted.”37 Thus, the Code requires a new meeting of creditors after conversion of a Chapter 13 case to Chapter 7.
Bankruptcy Rule 2003—the rule that fixes the timing and place for the meeting of creditors—says nothing specific about the meeting of creditors after conversion from Chapter 13 to Chapter 7. Most districts reasonably imply that the timing in Bankruptcy Rule 2003(a) applies and a new meeting of creditors is called “no fewer than 20 and no more than 40 days” after the date of conversion from Chapter 13.38 The Code mandates that the debtor appear and submit to examination under oath at the new meeting of creditors.39 It has been held that the bankruptcy court has discretion whether the debtor must be physically present at the new § 341 meeting after conversion from Chapter 13 to Chapter 7.40
A final quick caution to debtors’ counsel: the fee disclosure requirement in Bankruptcy Rule 2016(b)41 requires a “supplemental statement . . . within 15 days after any payment or agreement not previously disclosed.”42 It is not uncommon for attorneys to charge an additional fee when a Chapter 13 case converts to Chapter 7. If an additional fee for conversion was not already disclosed, counsel should file a supplemental Rule 2016(b) disclosure with the other new documents at conversion. The failure to do so invites trouble.43
1 See also Fed. R. Bankr. P. 1007(c) (“Schedules and statements filed prior to the conversion of the case to another chapter shall be deemed filed in the converted case unless the court directs otherwise.”). See discussion at § 142.2 Deadlines and Filing Requirements at Conversion after BAPCPA.
2 See DiBraccio v. Ferretti (In re Ferretti), 230 B.R. 883, 887–88 (Bankr. S.D. Fla. 1999) (“[N]othing in the Rules or Code appears to require amended schedules at conversion. Rather, the Rules suggest that new schedules are not required. Rule 1007(c) states: ‘[s]chedules and statements filed prior to the conversion . . . shall be deemed filed in the converted case,’ . . . and the same language is restated in Rule 1019(1)(A). Rule 1019 also forecloses the notion that a debtor must file new schedules or reclaim exemptions after conversion. The language of that rule precisely states which forms a debtor must file after conversion, and except in certain instances of bad faith, the rule does not include schedules among the forms a debtor is required to file. . . . From these rules, it is apparent that any debtor in a case converted to Chapter 7 is not required to file new schedules.”).
3 See § 35.4 [ Schedule C—Exemptions ] § 36.10 Schedule C—Exemptions.
5 Fed. R. Bankr. P. 1019(1)(B).
6 See In re Rodgers, 273 B.R. 186 (Bankr. C.D. Ill. 2002) (After conversion from Chapter 13 to Chapter 7, debtor’s failure to file statement of intention to reaffirm a debt does not preclude redemption after the 45-day period in § 521(2)(B). Debtor can redeem for the balance of the allowed secured claim after accounting for payments under the confirmed plan.).
7 See § 311.1 [ Conversion by Debtor ] § 141.1 Conversion by Debtor.
8 Fed. R. Bankr. P. 2002(f).
9 See Fed. R. Bankr. P. 1019(2), discussed below in this section.
10 See Massa v. Addona (In re Massa), 187 F.3d 292, 297–98 (2d Cir. 1999) (Creditor’s action in state court to determine nondischargeability of claim under §§ 523(a)(2) and 523(a)(3) did not violate discharge injunction in § 524 because creditor had knowledge of Chapter 13 petition but was without notice or knowledge of conversion from Chapter 13 to Chapter 7. “Massa’s failure to notify the Addonas of the conversion from Chapter 13 to Chapter 7 is important in this case because creditors’ responsibilities are completely different under each chapter. Under Chapter 7, the issue of discharge turns upon notice/knowledge and not the scheduling of the debt; under Chapter 13, it turns on scheduling . . . . The difference is illustrated in the case of creditors such as the Addonas, who believe that the debt was induced by fraud. If they have knowledge of a Chapter 7 proceeding, they would have to act or would lose their right to collect the debt. Scheduling is irrelevant if they possessed adequate knowledge. See 11 U.S.C. § 523(a)(3). In a Chapter 13 proceeding, however, they need not act to protect their debt. . . . [W]hile the Addonas had knowledge of the Chapter 13 proceeding, they were not required to do anything to preserve their right to collect their unscheduled debt later; their inaction in the context of a Chapter 13 proceeding should not act to their detriment in the context of a Chapter 7 proceeding of which they had no notice or actual knowledge. . . . Because the Addonas had neither notice nor actual knowledge of the Chapter 7 proceeding, the debt was never discharged.”).
11 When the Chapter 13 case is converted without court order by notice of conversion under 11 U.S.C. § 1307(a), see § 311.1 [ Conversion by Debtor ] § 141.1 Conversion by Debtor, the date of the filing of the notice “becomes the date of the conversion order for the purposes of applying . . . Rule 1019.” Fed. R. Bankr. P. 1017(f)(3).
12 Fed. R. Bankr. P. 1019(5)(B)(i). See DiBraccio v. Ferretti (In re Ferretti), 230 B.R. 883, 888 (Bankr. S.D. Fla. 1999) (“[A]t conversion, . . . the debtor must filed a schedule of unpaid, post-petition, pre-conversion debts.”). See § 314.1 [ On Postpetition Claims ] § 142.5 On Postpetition Claims for discussion of the effects of conversion on debts incurred during the Chapter 13 case.
13 Fed. R. Bankr. P. 1019(5)(B)(i).
14 Fed. R. Bankr. P. 1019(5)(C)(ii), (iii).
15 See § 316.1 [ In Cases Filed after October 22, 1994 ] § 143.2 In Cases Filed after October 22, 1994.
16 Fed. R. Bankr. P. 1019(5)(C)(i). See DiBraccio v. Ferretti (In re Ferretti), 230 B.R. 883, 888 (Bankr. S.D. Fla. 1999) (“In conversions from . . . Chapter 13 . . . when the case is converted in bad faith, the debtor must also file a list of property acquired post-petition that was not included in the trustee’s final report. In Chapter 13 cases, however, when, as here, there are no allegations of bad faith, the debtor need not disclose additional property acquired post-petition. This rule is consistent with the definition of property of the estate in 11 U.S.C. § 348(f) for cases converted to Chapter 7 from Chapter 13.”).
17 Fed. R. Bankr. P. 1019(6).
18 See § 314.1 [ On Postpetition Claims ] § 142.5 On Postpetition Claims for discussion of § 348(d) claims.
19 11 U.S.C. § 348(f)(1)(A), as amended by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 311, 108 Stat. 4106 (1994). See § 316.1 [ In Cases Filed after October 22, 1994 ] § 143.2 In Cases Filed after October 22, 1994.
20 11 U.S.C. § 348(f)(1)(B), as amended by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 311, 108 Stat. 4106 (1994). See § 145.2 In Cases Filed after October 22, 1994 and § 145.3 Lienholders’ Rights at Conversion under § 348(f) after BAPCPA.
21 11 U.S.C. § 348(e) (“conversion of a case under . . . section 1307 of this title terminates the services of any trustee . . . that is serving in the case before such conversion.”).
22 Fed. R. Bankr. P. 1019(5)(B)(ii) (“The trustee, not later than thirty days after conversion of the case, shall file and transmit to the United States trustee a final report and account.”).
23 See § 317.1 [ Exemptions at Conversion ] § 144.1 Exemptions at Conversion. See, e.g., In re Rogers, 278 B.R. 201 (Bankr. D. Nev. 2002) (Conversion from Chapter 13 to Chapter 7 does not restart the 30-day period for objecting to exemptions under Bankruptcy Rule 4003(b) unless the debtor amends or supplements the exemptions previously claimed.).
24 See 11 U.S.C. § 348(a).
25 See, e.g., Lee v. National Home Ctrs., Inc. (In re Bodenstein), 253 B.R. 46, 50–51 (B.A.P. 8th Cir. 2000) (Two-year limitations period in § 546(a) is not tolled during a Chapter 13 case prior to conversion to Chapter 7 when preference was revealed in the Chapter 13 case and known to the Chapter 7 trustee before the two years expired. Chapter 13 plan stated there would be no preference actions so long as creditors were paid 100%. Chapter 13 converted to Chapter 7 approximately three months before expiration of the two-year limitations period in § 546(a). “The bankruptcy court properly concluded that no fraud or other extraordinary circumstances existed which would cause the statute of limitations to be equitably tolled. . . . The Debtors clearly did not conceal the potential preferential transfers to the Defendant. To the contrary, the Debtors disclosed the transfers in their original statement of financial affairs. The Chapter 13 Trustee was thus aware of the potential causes of action and simply chose not to pursue them. . . . Furthermore, at the time the Chapter 7 trustee was appointed, almost three months remained before the expiration of the statute of limitations period. He likewise had notice of the potential causes of action before the expiration of the statute of limitations and failed to timely act.”); Murphy v. Wray (In re Wray), 258 B.R. 777 (Bankr. D. Idaho 2001) (Chapter 7 trustee’s cause of action under § 544 to avoid debtor’s father’s unperfected life estate in real property is barred by § 546(a) because three years passed between filing of Chapter 13 and conversion to Chapter 7; equitable tolling is not available because life estate was revealed in the Chapter 13 case but not pursued by the Chapter 13 trustee before conversion.); Sapir v. Eli Haddad Corp. (In re Coco), 67 B.R. 365 (Bankr. S.D.N.Y. 1986).
26 See In re Spoon, 185 B.R. 758, 761 (Bankr. W.D. Tenn. 1995) (In a Chapter 13 case filed before December 1, 1992, but converted to Chapter 7 in June of 1995, because the Chapter 7 case is “deemed” to have commenced on the date of the Chapter 13 filing, “it is not appropriate to charge the debtor herein either the new $30.00 miscellaneous fee pursuant to 28 U.S.C. § 1930(b) or the increased $10.00 fee pursuant to 28 U.S.C. § 1930(a)(1).”).
27 11 U.S.C. § 348(b). See § 314.1 [ On Postpetition Claims ] § 142.5 On Postpetition Claims.
28 See, e.g., Karton v. Dougherty (In re Dougherty), 285 B.R. 719, 725 (Bankr. C.D. Cal. 2002) (After conversion to Chapter 7, discharge is denied based on misrepresentations during the Chapter 13 case and finding that the Chapter 13 case was itself a scheme to hinder, delay or defraud creditors. “The chapter 13 case, the original plan and the Amended Plan all were filed as part of a scheme to hinder, delay and defraud [a creditor] by (a) obtaining a return of the $56,000 of Levied Cash in exchange for an agreement to pay creditors pursuant to a 5-year repayment plan; (b) investing that Levied Cash in the Debtor’s residence, which he claimed as exempt; and (c) then converting the Debtor’s case to a case under chapter 7 before making the payments to creditors under the plan. . . . Debtor had actual knowledge that his income was far less than he would have needed to maintain his promised payments under the plan or the Amended Plan and the Debtor had no reasonable basis for believing his disposable income would increase to an amount sufficient to fund his promised payments thereunder before he would have defaulted. The Debtor made . . . multiple misrepresentations and omissions from the Original Schedules and the Amended Schedules as part of this scheme.” During the Chapter 13 case, debtor maintained a secret trust account into which he deposited unrevealed income, the debtor hid an ownership interest in a corporation and distributions from that corporation, and the debtor filed a fake proof of claim on behalf of his parents, reduced to facilitate eligibility for Chapter 13 but subject to an unrevealed condition that increased the claim in the event of conversion to Chapter 7.).
29 Fed. R. Bankr. P. 1019(3) (“All claims actually filed by a creditor before conversion of the case are deemed filed in the Chapter 7 case.”).
30 See § 73.5 Interest Not Required, with Exceptions, § 73.6 Treatment of Priority Claims Changed by BAPCPA, § 136.16 Postpetition Interest on Priority Claims before BAPCPA and § 136.17 Postpetition Interest on Priority Claims after BAPCPA.
31 See § 284.1 [ Amended Claims ] § 133.4 Amended Claims.
32 See Holway v. United States (In re Holway), 237 B.R. 217, 219 (Bankr. M.D. Fla. 1999) (Although debtor did not have to pay interest on priority tax claims during Chapter 13 case, upon conversion to Chapter 7, postpetition interest and penalties become payable notwithstanding payment in full of priority claim prior to conversion. “Under Chapter 13 of the Bankruptcy Code, a debtor is afforded a unique opportunity to pay the IRS only a portion of its claim in full. . . . [B]ecause the ‘deferred cash payments’ do not bear interest, . . . the debtor who successfully completes their Chapter 13 plan enjoys this unique ability to pay their tax liability without the penalties and interest normally associated with tax debt. . . . In this case, the Debtor paid the priority tax debt, in full, under a confirmed Chapter 13 plan. The Debtor, however, did not complete the plan payments, and did not receive a Chapter 13 discharge. Instead, the Debtor converted the case and received a Chapter 7 discharge. . . . [A]ny unpaid tax debt in question in this case would not be discharged. . . . [I]f the underlying tax is nondischargeable, the penalties and interest on that tax are nondischargeable, including postpetition interest.”).
33 See § 134.1 Timing, Form, Superseding and Amended Claims before 2005, § 134.2 Filing of Claims by Debtor or Trustee after 2005 Amendments to Bankruptcy Rule 3004 and § 134.3 Strategic Considerations: When to File Claims for Creditors.
34 In re Pegues, 266 B.R. 328 (Bankr. D. Md. 2001) (After conversion to Chapter 7, Chapter 13 trustee has authority to object to claims to complete the distribution of payments; bankruptcy court sustains Chapter 13 trustee’s objection to an abandoned claim to permit the disbursement of refunded monies to creditors with allowed claims under confirmed plan.).
35 See Goralnick v. Bromberg (In re Goralnick), 81 B.R. 570 (B.A.P. 9th Cir. 1987) (Upon conversion from Chapter 13 to Chapter 7, a new period arises for filing complaints objecting to discharge or dischargeability.); In re Rogers, 278 B.R. 201, 202 (Bankr. D. Nev. 2002) (“[U]pon conversion, the Bankruptcy Rules specify new deadlines under RULE 3002 (filing of claims), RULE 4004 (object to discharge), and RULE 4007 (determine dischargeability).”). See also McClendon v. DeVoll (In re DeVoll), 266 B.R. 81 (Bankr. N.D. Tex. 2001) (In a Chapter 42 case—Chapter 11 converted to Chapter 13 converted back to Chapter 11 then converted to Chapter 7—complaint objecting to discharge and dischargeability was timely filed because conversion to Chapter 7 started new time period; debtor’s discharge was barred under § 727(a)(4)(A).); In re Dawson, 185 B.R. 406 (Bankr. D.R.I. 1993) (After conversion from Chapter 13 to Chapter 7, objection to confirmation filed during the Chapter 13 case that alleges misconduct and requests a declaration that a claim is nondischargeable under § 523(a)(4) constitutes an “amendable dischargeability complaint” that satisfies the deadline in Bankruptcy Rule 4007(c).).
36 11 U.S.C. § 341(a).
37 11 U.S.C. § 348(a).
38 See Fed. R. Bankr. P. 2003(a).
39 11 U.S.C. § 343.
40 See In re Henson, 302 B.R. 884, 888–90 (Bankr. N.D. Cal. 2003) (After conversion to Chapter 7, new § 341 meeting is required, but bankruptcy court has discretion whether debtor must be physically present. “[S]ince § 348(a) provides that a conversion order constitutes an order for relief under the new chapter, § 341 calls for a meeting of creditors to be held within a reasonable time post-conversion. . . . [T]here are two orders for relief in a converted case—the first occurs when the original petition is filed . . . the second occurs when the conversion order is made . . . . [T]he Bankruptcy Codes does require a § 341 meeting to be held after a case is converted from one chapter to another. . . . [I]t would be absurd to construe the mandatory language of § 343 to mean that the Court lacks any discretion to excuse appearance, because § 109 concerning eligibility and § 727 concerning denial of discharge include no requirement of appearance at the § 341 meeting, which suggests that Congress did not intend to ‘strip the bankruptcy court of all discretion to excuse an individual debtor’s appearance at a § 341 meeting, at least where such appearance would be impossible or utterly pointless.’ . . . [T]he Bankruptcy Code and the FRBP are silent as to the manner in which such appearances must be made . . . [M]odern technology offers a method of appearance that is fully equivalent to a personal appearance.”).
41 See § 36.3 [ Attorney’s Disclosure of Compensation ] § 36.26 Attorney’s Disclosure of Compensation.
42 Fed. R. Bankr. P. 2016(b).
43 See, e.g., In re Whaley, 282 B.R. 38 (Bankr. M.D. Fla. 2002) (At conversion from Chapter 13 to Chapter 7, attorney must disgorge $500 he received as a condition for conversion because counsel did not amend the 2016 disclosure to reveal the $500 until after he was caught.).