U.S. Code » Title 11 » Chapter CHAPTER 7— LIQUIDATION › Subchapter SUBCHAPTER I— OFFICERS AND ADMINISTRATION

11 U.S.C. § 706

Conversion

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(a) The debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title. Any waiver of the right to convert a case under this subsection is unenforceable.(b) On request of a party in interest and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 11 of this title at any time.(c) The court may not convert a case under this chapter to a case under chapter 12 or 13 of this title unless the debtor requests or consents to such conversion.(d) Notwithstanding any other provision of this section, a case may not be converted to a case under another chapter of this title unless the debtor may be a debtor under such chapter.(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2606; Pub. L. 99–554, title II, § 257(q), Oct. 27, 1986, 100 Stat. 3115; Pub. L. 103–394, title V, § 501(d)(22), Oct. 22, 1994, 108 Stat. 4146; Pub. L. 109–8, title I, § 101, Apr. 20, 2005, 119 Stat. 27.)Historical and Revision Noteslegislative statements

Section 706(a) of the House amendment adopts a provision contained in the Senate amendment indicating that a waiver of the right to convert a case under section 706(a) is unenforceable. The explicit reference in title 11 forbidding the waiver of certain rights is not intended to imply that other rights, such as the right to file a voluntary bankruptcy case under section 301, may be waived.

Section 706 of the House amendment adopts a similar provision contained in H.R. 8200 as passed by the House. Competing proposals contained in section 706(c) and section 706(d) of the Senate amendment are rejected.

senate report no. 95–989

Subsection (a) of this section gives the debtor the one-time absolute right of conversion of a liquidation case to a reorganization or individual repayment plan case. If the case has already once been converted from chapter 11 or 13 to chapter 7, then the debtor does not have that right. The policy of the provision is that the debtor should always be given the opportunity to repay his debts, and a waiver of the right to convert a case is unenforceable.

Subsection (b) permits the court, on request of a party in interest and after notice and a hearing, to convert the case to chapter 11 at any time. The decision whether to convert is left in the sound discretion of the court, based on what will most inure to the benefit of all parties in interest.

Subsection (c) is part of the prohibition against involuntary chapter 13 cases, and prohibits the court from converting a case to chapter 13 without the debtor’s consent.

Subsection (d) reinforces section 109 by prohibiting conversion to a chapter unless the debtor is eligible to be a debtor under that chapter.

Editorial NotesAmendments

2005—Subsec. (c). Pub. L. 109–8 inserted “or consents to” after “requests”.

1994—Subsec. (a). Pub. L. 103–394 substituted “1208, or 1307” for “1307, or 1208”.

1986—Subsec. (a). Pub. L. 99–554, § 257(q)(1), inserted references to chapter 12 and section 1208 of this title.

Subsec. (c). Pub. L. 99–554, § 257(q)(2), inserted reference to chapter 12.

Statutory Notes and Related SubsidiariesEffective Date of 2005 Amendment

Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title.

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title.

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–554 effective 30 days after Oct. 27, 1986, but not applicable to cases commenced under this title before that date, see section 302(a), (c)(1) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure.

Notes of Decisions
Cited in 497 cases (46 in the last 5 years), 1940–2026 · leading case: Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007).
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Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007). · cites it 5× “11 U. S. C. §§706 (a), 1307(a) and (c). An issue that has arisen with disturbing frequency is whether a debtor who acts in bad faith prior to, or in the course of, filing a Chapter 13 petition by, for example, fraudulently concealing significant assets, thereby forfeits his…”
In Re Kuhn, 322 B.R. 377 (Bankr. N.D. Ind. 2005). · cites it 17× “As the Trustee has postured the issues, whether or not he succeeds is dependent upon another issue which does arise in Carol’s case — whether 11 U.S.C. § 706 (a) provides a debtor in Carol’s position with an absolute right to convert to Chapter 13, or whether her request can be…”
Cecil Daughtrey, Jr. v. Luis E. Rivera, II, 896 F.3d 1255 (11th Cir. 2018). · cites it 4× “The same day, Paul DeCailly replaced him as Debtors' attorney 33 and pursuant to 11 U.S.C. § 706 (a) filed a "Motion to Convert to a Case Under Chapter 11" (the "Motion to Convert").”
In re Quinn, 490 B.R. 607 (Bankr. D.N.M. 2012). · cites it 10× “The United States Trustee’s Alternative Request: Conversion under 11 U.S.C. § 706 The United States Trustee seeks an order converting this Chapter 7 case to a case under Chapter 11 as an alternative to dismissal.”
Croston v. Davis (In Re Croston), 313 B.R. 447 (9th Cir. BAP 2004). · cites it 6× “” 11 U.S.C. § 706 (a). The issue is whether a court can deny a § 706(a) conversion motion for reasons not stated in § 706.”
Jacobsen v. Moser (In Re Jacobsen), 609 F.3d 647 (5th Cir. 2010). · cites it 3× “When the trustee declared an intention to recover the house as an asset of the estate, Marrama sought to convert his case to Chapter 13 pursuant to 11 U.S.C. § 706 (a). Id. at 368-69 , 127 S.”
Proudfoot Consulting Co. v. Gordon (In Re Gordon), 465 B.R. 683 (Bankr. N.D. Ga. 2012). · cites it 5× “CONCLUSIONS OF LAW Proudfoot has filed a Motion to Convert under 11 U.S.C. § 706 (b), which provides, “[o]n request of a party in interest and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 11 of this title at any time.”
Rosson v. Fitzgerald (In Re Rosson), 545 F.3d 764 (9th Cir. 2008). · cites it 2× “In Marrama , the Court took up the same question addressed by the BAP in Croston — the right of a debtor, under 11 U.S.C. § 706 (a), to convert his Chapter 7 case to Chapter 13.”
In Re Spencer, 137 B.R. 506 (Bankr. N.D. Okla 1992). · cites it 6× “§ 157 (b)(2)(A), (O), 11 U.S.C. § 706 (a). There are two purely legal questions before the Court: (1) what is the procedural mechanism of conversion from Ch.”
In Re Graham, 21 B.R. 235 (Bankr. D. Iowa 1982). · cites it 10× “The appropriateness of an 11 U.S.C. § 706 (b) conversion depends upon the general concerns of Congress when it adopted the Bankruptcy Reform Act of 1978.”
Salem, Maurice J. v. Neshewat, Michael, 465 F.3d 767 (7th Cir. 2006). · cites it 2× “(This is Salem’s terminology; we do not wish to be understood as endorsing the idea that “conversion” is the right word to use for a request (1) to transfer a case from one bankruptcy court to another, and then (2) to convert the case from Chapter 7 to Chapter 13.”
Schlehuber v. Fremont Nat'l Bank & Trust Co. (In re Schlehuber), 489 B.R. 570 (8th Cir. BAP 2013). · cites it 4× “11 U.S.C. § 706 (b) Bankruptcy Code § 706(b) provides that “[o]n request of a party in interest and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 11 of this title at any time.”
Show all 497 citing cases →
— 11 U.S.C. § 706(1) — 1 case
In Re Credit Serv., Inc., 30 F. Supp. 878 (D. Maryland 1940).
— 11 U.S.C. § 706(2) — 1 case
In the Matter of Kdi Corp., Debtor. Frederick Beach & Vincent Di Rubbio v. Kdi Corp. & Kdi Creditors' Comm., 477 F.2d 726 (6th Cir. 1973).
— 11 U.S.C. § 706(a) — 5 cases
In Re Shankman, 382 B.R. 591 (Bankr. E.D.N.Y. 2008).
Zurkowsky v. Gov't Dev. Bank for P.R., 52 B.R. 1007 (D.P.R. 1985).
In Re Kaufman, 93 B.R. 319 (Bankr. S.D.N.Y. 1988).
Daniel Jason Clark (Bankr. S.D. Ala. 2022).
Michael C. Cyrilla (Bankr. W.D. Pa. 2020).
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