In re Baker
United States Bankruptcy Court for the Middle District of Florida
503 B.R. 751 (2013)
- Written by Abby Roughton, JD
Facts
Dr. Laura Baker (debtor) filed a chapter 7 bankruptcy petition. Based on the information in the schedules filed with Baker’s petition, Baker had a monthly net income of $19,000 and nonexempt assets of $47,589.93. The Internal Revenue Service (IRS) filed a proof of claim in Baker’s chapter 7 case for $1,316,536.72 based on income taxes owed by Baker for the tax years 2005 to 2012. The IRS’s claim included three component claims: (1) a secured claim for $53,589.93, (2) a potentially nondischargeable unsecured priority claim for $408,346.72, and (3) a general unsecured claim for $854,600.07. One of Baker’s other creditors, Florida Bank, moved to convert Baker’s bankruptcy case from a chapter 7 case to a chapter 11 case. In a chapter 11 case, Baker’s postpetition earnings would be included in the bankruptcy estate’s property, which meant that Baker’s creditors would receive a greater distribution than they would in the chapter 7 proceeding. Baker opposed the conversion, arguing that she would not be able to propose a confirmable chapter 11 plan because her income would be insufficient to pay the IRS’s priority tax claim within five years of the bankruptcy petition as required by 11 U.S.C. § 1129(a)(9)(C). The bankruptcy court considered the parties’ arguments and decided whether to convert the case.
Rule of Law
Issue
Holding and Reasoning (Glenn, J.)
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