§ 1307(b) Voluntary Dismissal Is Not Immediate or Self-Executing: Bankruptcy Court May Decide Stay Relief First and Condition Dismissal (Including § 109(g)(2) Bar)

1. Introduction

In Lorenzo Luciano Lopez v. Lon A. Jenkins, Chapter 13 Trustee, and Auntie Tut Trust (10th Cir. BAP Feb. 3, 2026) (unpublished), the Tenth Circuit Bankruptcy Appellate Panel (“BAP”) addressed a recurring bankruptcy tactic: last-minute transfers of an interest in real property to “connected” parties followed by serial bankruptcy filings to invoke the automatic stay and obstruct foreclosure or trustee’s sale.

The dispute arose from a trust deed encumbering property in Herriman, Utah (the “Property”). After the original obligor (Johnathan Darger) filed two Chapter 13 cases timed immediately before scheduled sales—both dismissed for failure to file required documents—an affiliated entity quitclaimed an interest to Lorenzo Lopez on December 30, 2024, and Lopez filed his own Chapter 13 case the same day. The secured creditor, Auntie Tut Trust (the “Trust”), promptly moved to dismiss, sought relief from stay under 11 U.S.C. § 362(d)(1), and sought in rem relief under § 362(d)(4) alleging a “scheme to delay, hinder, or defraud creditors.”

One day before the scheduled hearing on the Trust’s stay motion, Lopez filed a request to voluntarily dismiss under § 1307(b) and argued the bankruptcy court lost jurisdiction to rule on the pending stay motion. The bankruptcy court proceeded with the hearing (Lopez did not appear), granted stay relief (including in rem relief), then dismissed the case, imposing a 180-day refiling bar under § 109(g)(2). On appeal (limited here to the dismissal order), the central issue was whether the bankruptcy court was required to dismiss “immediately” upon the debtor’s request and therefore was prohibited from ruling on stay relief first.

2. Summary of the Opinion

The BAP affirmed the dismissal order. Although it recognized the majority view that a Chapter 13 debtor’s right to dismissal under § 1307(b) is “absolute” in the sense that the court must dismiss (absent conversion history), the BAP held that this right is not required to be immediate, self-executing, or unconditional.

Accordingly, the bankruptcy court did not err by:

  • conducting the already-scheduled hearing,
  • delaying entry of the dismissal order long enough to rule on the pending stay-relief request, and
  • imposing a § 109(g)(2) 180-day bar because the debtor sought and obtained dismissal after a stay-relief motion had been filed.

The BAP also rejected Lopez’s argument that the bankruptcy court failed to make findings under Rule 7052, emphasizing that the dismissal order incorporated the court’s on-the-record reasons, which included substantial findings of bad faith and abuse.

3. Analysis

3.1 Precedents Cited

A. Judicial notice and appellate basics

  • Hutchinson v. Hahn, 402 F. App’x 391 (10th Cir. 2010) (unpublished), citing St. Louis Baptist Temple, Inc. v. Fed. Deposit Ins. Corp., 605 F.2d 1169 (10th Cir. 1979): used to confirm the bankruptcy court properly took judicial notice of related bankruptcy filings—critical in identifying the serial-filing pattern and timing.
  • In re Shattuck, 411 B.R. 378 (10th Cir. BAP 2009): cited for the proposition that an order dismissing a Chapter 13 case is a final, appealable order.
  • In re Taylor, 737 F.3d 670 (10th Cir. 2013): supplied the de novo standard for interpreting and applying the Bankruptcy Code.
  • Adler v. Wal-Mart Stores, Inc., 144 F.3d 664 (10th Cir. 1998): used for waiver principles—issues listed but not developed are treated as waived.

B. The “absolute” right to dismiss under § 1307(b) (and what “absolute” does—and does not—mean)

  • In re Robinson, No. UT-02-043, 2003 WL 1442465 (10th Cir. BAP Mar. 21, 2003) (unpublished): recognized the general understanding that § 1307(b) affords an “absolute” right to dismiss (subject to the statute’s express conversion exception). This case anchored the BAP’s acknowledgement of the majority baseline rule.
  • In re Barbieri, 199 F.3d 616 (2d Cir. 1999): cited in the opinion’s statutory framework discussion and addressed by Lopez as supporting “immediate and unconditional” dismissal. The BAP treated it as nonbinding and, importantly, as undermining Lopez’s position because Barbieri recognizes that, notwithstanding voluntary dismissal, courts may impose sanctions and dismissal entails consequences such as loss of the automatic stay.
  • In re Smith, 999 F.3d 452 (6th Cir. 2021) and In re Nichols, 10 F.4th 956 (9th Cir. 2021): cited via Collier to show the prevailing view that § 1307(b)’s dismissal right is not conditioned on an implied good-faith requirement and is not defeated by a pending § 1307(c) motion.
  • In re Jacobsen, 609 F.3d 647 (5th Cir. 2010): relied upon by Lopez, but the BAP found it nonbinding and “inapposite,” noting it concerned a court’s discretion to convert under § 1307(c) for bad faith notwithstanding a dismissal request—rather than whether a court may briefly delay dismissal to resolve stay relief and related protective measures.

C. Procedure and timing: dismissal is not self-executing; courts may act before entry of a dismissal order

  • In re Rebeor, 89 B.R. 314 (Bankr. N.D.N.Y. 1988): cited for the idea that a court is not even required to hold a hearing before granting a debtor’s requested dismissal—supporting the proposition that hearings are discretionary, not forbidden.
  • In re Campbell, No. 07-457, 2007 WL 4553596 (Bankr. N.D. W. Va. Dec. 18, 2007) (unpublished): cited for the “better procedure” of providing notice and a response deadline so parties can request conditions on dismissal and for the broader point that motions can ripen into contested matters when a response raises issues.
  • In re Davis, 352 B.R. 758 (Bankr. D.S.C. 2006): cited for the view that notice and opportunity for hearing may be appropriate because dismissal can be conditioned under § 349.
  • United States v. Freeman, 631 F. App’x 784 (11th Cir. 2015) (unpublished), Ross v. AmeriChoice Fed. Credit Union, 530 B.R. 277 (E.D. Pa. 2015), rev’d on other grounds, 858 F.3d 779 (3d Cir. 2017), and In re Kelly, 671 B.R. 432 (D. Md. 2025): collectively used to reinforce the BAP’s key procedural holding—a § 1307(b) request is a motion and not self-executing, so the bankruptcy court is not automatically divested of authority to manage and decide pending matters before entering the dismissal order.
  • In re Merritt, 39 B.R. 462 (Bankr. E.D. Pa. 1984) and In re Kemp, No. 21-40365, 2022 WL 50368 (Bankr. D. Kan. Jan. 5, 2022) (unpublished): cited for the proposition that § 1307(b) does not dictate the “time or manner” of dismissal entry and that an “immediate dismissal” rule would conflict with the ability to impose conditions under § 349(a).

D. Conditioning dismissal and protecting the system from abuse

  • In re Duran, 630 B.R. 797 (9th Cir. BAP 2021) and In re Minogue, 632 B.R. 287 (Bankr. D.S.C. 2021): cited for the idea that a § 1307(b) motion can serve as a platform for considering the effect of dismissal under § 349(a) and that courts retain authority to enter remedial orders alongside dismissal.
  • In re Hamlin, No. 09-05272-8-SWH, 2010 WL 749809 (Bankr. E.D.N.C. Mar. 1, 2010) (unpublished): cited for the proposition that the “absolute” right to dismiss does not prevent a court from delaying entry briefly to protect creditor rights.
  • In re Dilley, 125 B.R. 189 (Bankr. N.D. Ohio 1991), In re Greenberg, 200 B.R. 763 (Bankr. S.D.N.Y. 1996), and In re Harper-Elder, 184 B.R. 403 (Bankr. D. D.C. 1995): cited to support the principle that dismissal may carry “strings” (conditions, sanctions, or tailored effects) without negating the debtor’s statutory right to dismissal.

3.2 Legal Reasoning

The BAP’s reasoning is a synthesis of three propositions:

  1. § 1307(b) is mandatory as to outcome, not instantaneous as to timing. The word “shall” means the court must dismiss a Chapter 13 case upon the debtor’s request (if the case has not been previously converted), but the statute does not say the case is dismissed upon filing a request. Instead, the Bankruptcy Rules contemplate process: a motion filed and served under Rule 1017(f)(2) and Rule 9013, followed by the court’s entry of an order.
  2. A § 1307(b) motion does not strip the court of authority to decide pending matters before the dismissal order enters. Because the motion is not self-executing, the case remains pending until the court enters an order. The BAP therefore rejected Lopez’s “triggered dismissal” theory and held the bankruptcy court could rule on the already-filed § 362 stay-relief motion first.
  3. Dismissal is not necessarily unconditional; the Code itself supplies consequences and protective tools. The bankruptcy court’s dismissal order imposed a § 109(g)(2) 180-day bar, and the BAP emphasized this bar would apply in any event because Lopez requested and obtained voluntary dismissal after a stay-relief motion had been filed. In parallel, the BAP endorsed the bankruptcy court’s view that courts may impose “strings” under § 349(a) to deter abuse.

On findings, the BAP held that incorporating oral findings into a written order sufficed. The bankruptcy court made extensive on-the-record findings supporting a bad-faith filing pattern, including serial filings timed to sales and the transfer of an interest to Lopez immediately before filing—facts consistent with a “scheme” to misuse the automatic stay.

3.3 Impact

Although the decision is unpublished and “not precedential” under 10th Cir. BAP L.R. 8026-6, it is likely to be influential in three practical ways within the Tenth Circuit:

  • Debtors cannot reliably defeat creditor stay-relief motions by filing a last-minute § 1307(b) dismissal request. The opinion rejects the notion that a dismissal request instantly moots pending matters.
  • Creditors can seek protective orders (including in rem relief) even when dismissal is imminent. By approving the sequencing—stay relief first, dismissal second—the BAP helps preserve the utility of § 362(d)(4) in combating repeat-transfer/repeat-filing schemes.
  • § 109(g)(2) is a built-in deterrent to “dismiss-and-refile” tactics once a stay-relief motion is on file. The opinion underscores that the refiling bar is not discretionary when its statutory predicate is satisfied.

4. Complex Concepts Simplified

  • Automatic stay (§ 362): an immediate injunction that stops most collection actions (including foreclosure) upon filing bankruptcy. It is powerful—and thus commonly targeted for abuse in serial filings.
  • Relief from stay (§ 362(d)(1)): permission for a creditor to proceed with enforcement (e.g., foreclosure) “for cause,” which can include bad faith or lack of adequate protection.
  • In rem stay relief (§ 362(d)(4)): a remedy aimed at real-property schemes; it can make future bankruptcy filings ineffective to reimpose the stay as to the property when there has been a scheme involving transfers and/or multiple filings.
  • “Absolute” right to dismiss (§ 1307(b)): “absolute” here means the court must ultimately dismiss (absent conversion history), not that dismissal happens instantly upon a debtor’s request or that the court cannot attach legally authorized consequences.
  • Not “self-executing”: filing a motion requests an order; it does not itself create the legal result. The case remains pending until the judge enters an order of dismissal.
  • Conditions/effects of dismissal (§ 349(a)): the court may, in appropriate circumstances, alter the normal effects of dismissal to prevent abuse (e.g., dismissal with prejudice or other remedial provisions).
  • 180-day bar (§ 109(g)(2)): a statutory ineligibility period triggered when a debtor voluntarily dismisses after a stay-relief motion is filed; it curtails immediate refiling designed to reimpose the stay.
  • Rule 7052 (findings): requires the court to make findings and conclusions in certain contested matters; incorporation of oral findings into a written order can satisfy this requirement when the record is adequately developed.
  • Nunc pro tunc: an order entered “now for then,” retroactively effective as of an earlier date. The BAP noted some courts do this for § 1307(b) dismissals, but there was no Tenth Circuit authority requiring it, and it was not used here.

5. Conclusion

The BAP’s core contribution is a clear sequencing rule: a Chapter 13 debtor’s § 1307(b) dismissal right does not require immediate, unconditional, or self-effectuating dismissal, and the bankruptcy court may decide a pending stay-relief motion—and impose statutory or remedial consequences such as a § 109(g)(2) refiling bar—before entering the dismissal order.

In a system repeatedly tested by serial filings tied to foreclosure dates and strategic property transfers, the opinion reinforces that § 1307(b) cannot be converted into a procedural “off switch” that prevents courts from addressing abusive stay tactics and protecting the integrity of bankruptcy relief.