Memorandum of Decision Re: Value of Home in Case Converted to Chapter 7

NORTHERN DISTRICT OF CALIFORNIA
In re PAUL and THERESA KUHLMAN,                                 No. 99-13899      Debtor(s). ______________________________________/
Memorandum of Decision
     The debtors commenced this case as a Chapter 13 on December 30, 1999. They did not get around to filing their schedules until February 4, 2000. (1) They voluntarily converted the case to Chapter 7 on March 28, 2000.      In their schedules, the debtors valued their home at $250,000.00. The trustee believes that he can sell the home for about $350,000.00, thereby generating significant funds for the creditors. The debtors have asked the court to compel the trustee to abandon the home, arguing that the value of the property increased during the three months they were in Chapter 13.      In principle, the debtors' position has merit. Section 348(f)(1)(B) provides that the original property values apply in a converted case, so that postpetition appreciation belongs to the debtor. In re Wegner, 243 B.R. 731 (Bkrtcy.D.Neb. 2000).      However, as moving parties seeking to compel abandonment the debtors have the burden of proof. In re Dillon, 219 B.R. 781, 785 (Bkrtcy.M.D.Tenn.1998); Smoker v. Hill & Assocs., Inc., 204 B.R. 966, 975 (N.D.Ind.1997); In re Siegel, 204 B.R. 6, 8 (Bankr.W.D.N.Y.1996). The debtors have utterly failed to convince the court that their home appreciated 40% in the 53 days between the date they filed their schedules and the date they converted their case or in the 90 days between the date they filed their Chapter 13 petition and the date they converted. It is far more likely that the debtors simply undervalued their home in their schedules.      For the foregoing reasons, the debtors' motion to compel abandonment will be denied, without prejudice to renewal in 60 days if the trustee has not found a buyer within that time, and without prejudice to objection at the time the court is asked to approve a sale.      The debtors' motion for reconsideration, filed for some reason before the court had ruled on their motion, will be denied; the hearing date will be vacated. Their motion for a stay of the trustee's activities will also be denied. Counsel for the trustee shall submit an appropriate form of order.
Dated: June 20, 2000                                                                  ___________________________                                                                                                    Alan Jaroslovsky                                                                                                    U.S. Bankruptcy Judge

1. They signed the papers February 2, 200