Thomas William OHara v. Andrew R. Vara -Western District of Michigan at Grand Rapids
Split Score
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Case Summary
Disposition
Affirmed
The Sixth Circuit held that it had jurisdiction to review the district court’s affirmance of the bankruptcy court’s denial of Thomas O’Hara’s Rule 60(b) motion and affirmed the denial. Because O’Hara did not timely move to dismiss his Chapter 13 case before the bankruptcy court entered an order converting the case to Chapter 7, his absolute right to dismiss under §1307(b) had terminated, and the bankruptcy court did not abuse its discretion in refusing Rule 60(b) relief.
Circuit Split Identified
Legal Issue
Whether a Chapter 13 debtor’s statutory right under 11 U.S.C. §1307(b) to dismiss a case is absolute or is subject to a bad-faith/abuse-of-process exception that allows a court to deny dismissal and instead convert the case to Chapter 7.
Circuit Positions
Absolute right to dismiss under §1307(b); no bad-faith exception.
Court may deny dismissal and convert if the debtor acts in bad faith or abuses the bankruptcy process.
Conflict Summary
Several circuits (including the Sixth) interpret §1307(b) as granting an unconditional right to voluntary dismissal that cannot be overridden by a court’s bad-faith finding, while at least one circuit (Fifth) recognizes an implied bad-faith or abuse-of-process exception permitting conversion despite the debtor’s dismissal request.