Debtor’s right to dismiss the case

| Sep 21, 2010 | Bankruptcy |

A recent Northern District of Texas case was heard where the bankruptcy court was asked to determine the ability of a Chapter 13 debtor to move for dismissal while a motion to convert the case to Chapter 7 was pending due to the debtor’s bad faith.  The court concluded that the debtor’s right to dismiss the case was absolute.

The Court began with the Ron Pair premise that plain meaning is conclusive except in those rare cases in which the literal application of a statute produces a result demonstrably at odds with the intent of its drafters.  The language of the statutes states that, “On the request of the debtor at any time, if the case has not been converted…the Court shall dismiss a case under this chapter.”
Noting that “shall” is generally interpreted such that it gives judges no discretion, and that there is little uncertainty in the words “at any time,” the court found the statute to be unambiguous and that the debtor was allowed to dismiss.