Harmonizing Conversion and the Means Test in Bankruptcy
Determining whether the means test applies in cases converted from Chapter 13 to Chapter 7 has divided courts across the United States and has even caused bankruptcy judges within the same district court to disagree. In the nearly 15 years since the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), a majority of courts have held that the means test applies in converted cases. However, a considerable minority view has emerged, which virtually all scholarship on the issue has adopted. Although both the majority and minority views cause interpretive problems, this article argues that the means test should apply in cases converted from Chapter 13 to Chapter 7. This view promotes a better reading of § 707(b) and the Bankruptcy Code in general and prevents debtors from manipulating the bankruptcy system by filing under Chapter 13 and then converting to Chapter 7 to avoid the means test. Additionally, this article also provides language that Congress should adopt in amending the Bankruptcy Code to codify the view that the means test applies in converted cases.