In re Vetter, No. 11-03988-dd, 2012 WL 1597378, at *1–*2 (Bankr. D.S.C. May 7, 2012) (Duncan)

At death of debtor, counsel should have given notice to court and sought designation of representative before converting case to Chapter 7. “Fed. R. Bankr.P. 1016 provides that when a chapter 13 debtor dies, the ‘case may be dismissed; or if further administration is possible and in the best interest of the parties, the case may proceed and be concluded in the same manner, so far as possible, as though the death or incompetency had not occurred.’ Rule 1016 further provides that in a chapter 7 context, the death of a debtor ‘shall not abate a liquidation case’ and that the case, so far as possible, should continue as if the death had not occurred. Although the debtor died during the chapter 13 portion of the case following confirmation of the debtor’s plan, the debtor’s counsel made no request to the Court for the debtor’s personal probate estate representative to assume debtor’s duties under the Bankruptcy Code. It further appears that creditors, the chapter 13 trustee, and other parties in interest were not provided notice of the debtor’s death. . . . Rules 1016 and 1017(f) do not permit the debtor’s chapter 13 case to be converted to one under chapter 7 under the facts of this case. . . . The Court recognizes that a chapter 7 or chapter 13 case could be at the stage where notice of the debtor’s death and recognition of the authority of a personal representative would be less important than in this case. However, in most cases pleadings, amended schedules, reports, or an amended plan may be required. Parties in interest may well have service of process questions. Counsel for a deceased debtor needs direction concerning the authority of another party to act for the debtor. Finally, creditors and parties in interest may need to reevaluate their positions in a case based upon a debtor’s death such as deciding whether to prosecute a motion for stay relief or a discharge or dischargeability action or a motion to dismiss or to convert a case to another chapter. For these reasons, upon the death of a debtor, counsel for a deceased debtor should ordinarily promptly notify the Court of the debtor’s death and file a motion for designation of an appropriate person to act on the debtor’s behalf. The failure of the debtor’s counsel to take these actions in this case and his failure to respond to the motion to dismiss constitute cause for dismissal of this case. § 707(a).”

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