NORTHERN DISTRICT OF CALIFORNIA
PAUL and THERESA KUHLMAN, No. 99-13899
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
, 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
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 ___________________________
U.S. Bankruptcy Judge
1. They signed the papers February 2, 200