Court Opinion

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Date Created: 2015-05-18 15:01:54.795503+00
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(Slip Opinion)              OCTOBER TERM, 2014                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

     HARRIS v. VIEGELAHN, CHAPTER 13 TRUSTEE

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                  THE FIFTH CIRCUIT

        No. 14–400.      Argued April 1, 2015—Decided May 18, 2015
Individual debtors may seek discharge of their financial obligations
  under either Chapter 7 or Chapter 13 of the Bankruptcy Code. In a
  Chapter 7 proceeding, the debtor’s assets are transferred to a bank-
  ruptcy estate. 11 U.S. C. §541(a)(1). The estate’s assets are then
  promptly liquidated, §704(a)(1), and distributed to creditors, §726. A
  Chapter 7 estate, however, does not include the wages a debtor earns
  or the assets he acquires after the bankruptcy filing. §541(a)(1).
  Chapter 13, a wholly voluntary alternative to Chapter 7, permits the
  debtor to retain assets during bankruptcy subject to a court-approved
  plan for payment of his debts. Payments under a Chapter 13 plan
  are usually made from a debtor’s “future income.” 1322(a)(1). The
  Chapter 13 estate, unlike a Chapter 7 estate, therefore includes both
  the debtor’s property at the time of his bankruptcy petition, and any
  assets he acquires after filing. §1306(a). Because many debtors fail to
  complete a Chapter 13 plan successfully, Congress accorded debtors a
  nonwaivable right to convert a Chapter 13 case to one under Chapter
  7 “at any time.” §1307(a). Conversion does not commence a new
  bankruptcy case, but it does terminate the service of the Chapter 13
  trustee. §348(e).
    Petitioner Harris, indebted to multiple creditors and $3,700 behind
  on his home mortgage payments to Chase Manhattan, filed a Chap-
  ter 13 bankruptcy petition. His court-confirmed plan provided that
  he would resume making monthly mortgage payments to Chase, and
  that $530 per month would be withheld from his postpetition wages
  and remitted to the Chapter 13 trustee, respondent Viegelahn. Trus-
  tee Viegelahn would make monthly payments to Chase to pay down
  Harris’ mortgage arrears, and distribute remaining funds to Harris’
  other creditors. When Harris again fell behind on his mortgage pay-
2                        HARRIS v. VIEGELAHN

                                 Syllabus

    ments, Chase foreclosed on his home. Following the foreclosure, Vie-
    gelahn continued to receive $530 per month from Harris’ wages, but
    stopped making the payments earmarked for Chase. As a result,
    funds formerly reserved for Chase accumulated in Viegelahn’s pos-
    session. Approximately a year after the foreclosure, Harris converted
    his case to Chapter 7. Ten days after this conversion, Viegelahn dis-
    tributed $5,519.22 in Harris’ withheld wages mainly to Harris’ credi-
    tors. Asserting that Viegelahn lacked authority to disburse his post-
    petition wages to creditors postconversion, Harris sought an order
    from the Bankruptcy Court directing refund of the accumulated wag-
    es Viegelahn paid to his creditors. The Bankruptcy Court granted
    Harris’ motion, and the District Court affirmed. The Fifth Circuit re-
    versed, concluding that a former Chapter 13 trustee must distribute
    a debtor’s accumulated postpetition wages to his creditors.
Held: A debtor who converts to Chapter 7 is entitled to return of any
 postpetition wages not yet distributed by the Chapter 13 trustee.
 Pp. 5–11.
    (a) Absent a bad-faith conversion, §348(f) limits a converted Chap-
 ter 7 estate to property belonging to the debtor “as of the date” the
 original Chapter 13 petition was filed. Because postpetition wages do
 not fit that bill, undistributed wages collected by a Chapter 13 trus-
 tee ordinarily do not become part of a converted Chapter 7 estate.
 Pp. 5–6.
    (b) By excluding postpetition wages from the converted Chapter 7
 estate (absent a bad-faith conversion), §348(f) removes those earnings
 from the pool of assets that may be liquidated and distributed to
 creditors. Allowing a terminated Chapter 13 trustee to disburse the
 very same earnings to the very same creditors is incompatible with
 that statutory design. Pp. 7–8.
    (c) This conclusion is reinforced by §348(e), which “terminates the
 service of [the Chapter 13] trustee” upon conversion. One service
 provided by a Chapter 13 trustee is disbursing “payments to credi-
 tors.” §1326(c). The moment a case is converted from Chapter 13 to
 Chapter 7, a Chapter 13 trustee is stripped of authority to provide
 that “service.” P. 8.
    (d) Section 1327(a), which provides that a confirmed Chapter 13
 plan “bind[s] the debtor and each creditor,” and §1326(a)(2), which
 instructs a trustee to distribute “payment[s] in accordance with the
 plan,” ceased to apply once the case was converted to Chapter 7.
 §103(i). Sections 1327(a) and 1326(a)(2), therefore, offer no support
 for Viegelahn’s assertion that the Bankruptcy Code requires a termi-
 nated Chapter 13 trustee to distribute to creditors postpetition wages
 remaining in the trustee’s possession. Continuing to distribute funds
 to creditors pursuant to a defunct Chapter 13 plan, moreover, is not
                    Cite as: 575 U. S. ____ (2015)                   3

                               Syllabus

  one of the trustee’s postconversion responsibilities specified by the
  Federal Rules of Bankruptcy Procedure. Pp. 8–10.
    (e) Because Chapter 13 is a voluntary alternative to Chapter 7, a
  debtor’s postconversion receipt of a fraction of the wages he earned
  and would have kept had he filed under Chapter 7 in the first place
  does not provide the debtor with a “windfall.” A trustee who distrib-
  utes payments regularly may have little or no accumulated wages to
  return, while a trustee who distributes payments infrequently may
  have a sizable refund to make. But creditors may gain protection
  against the risk of excess accumulations in the hands of trustees by
  seeking to have a Chapter 13 plan include a schedule for regular dis-
  bursement of collected funds. Pp. 10–11.
757 F.3d 468, reversed and remanded.

  GINSBURG, J., delivered the opinion for a unanimous Court.
                        Cite as: 575 U. S. ____ (2015)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash­
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 14–400
                                   _________________

  CHARLES E. HARRIS, III, PETITIONER v. MARY K. 

       VIEGELAHN, CHAPTER 13 TRUSTEE

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

            APPEALS FOR THE FIFTH CIRCUIT

                                 [May 18, 2015] 

   JUSTICE GINSBURG delivered the opinion of the Court.
   This case concerns the disposition of wages earned by a
debtor after he petitions for bankruptcy. The treatment of
postpetition wages generally depends on whether the
debtor is proceeding under Chapter 13 of the Bankruptcy
Code (in which the debtor retains assets, often his home,
during bankruptcy subject to a court-approved plan for the
payment of his debts) or Chapter 7 (in which the debtor’s
assets are immediately liquidated and the proceeds dis­
tributed to creditors). In a Chapter 13 proceeding, post-
petition wages are “[p]roperty of the estate,” 11 U.S. C.
§1306(a), and may be collected by the Chapter 13 trustee
for distribution to creditors, §1322(a)(1). In a Chapter 7
proceeding, those earnings are not estate property; in­
stead, they belong to the debtor. See §541(a)(1). The Code
permits the debtor to convert a Chapter 13 proceeding to
one under Chapter 7 “at any time,” §1307(a); upon such
conversion, the service of the Chapter 13 trustee termi­
nates, §348(e).
   When a debtor initially filing under Chapter 13 exercises
his right to convert to Chapter 7, who is entitled to post­
2                  HARRIS v. VIEGELAHN

                     Opinion of the Court

petition wages still in the hands of the Chapter 13 trustee?
Not the Chapter 7 estate when the conversion is in good
faith, all agree. May the trustee distribute the accumu­
lated wage payments to creditors as the Chapter 13 plan
required, or must she remit them to the debtor? That is
the question this case presents. We hold that, under the
governing provisions of the Bankruptcy Code, a debtor
who converts to Chapter 7 is entitled to return of any
postpetition wages not yet distributed by the Chapter 13
trustee.
                               I

                               A

   The Bankruptcy Code provides diverse courses overbur­
dened debtors may pursue to gain discharge of their finan­
cial obligations, and thereby a “fresh start.” Marrama v.
Citizens Bank of Mass., 549 U.S. 365, 367 (2007) (quoting
Grogan v. Garner, 498 U.S. 279, 286 (1991)). Two roads
individual debtors may take are relevant here: Chapter 7
and Chapter 13 bankruptcy proceedings.
   Chapter 7 allows a debtor to make a clean break from
his financial past, but at a steep price: prompt liquidation
of the debtor’s assets. When a debtor files a Chapter 7
petition, his assets, with specified exemptions, are imme­
diately transferred to a bankruptcy estate. §541(a)(1). A
Chapter 7 trustee is then charged with selling the prop­
erty in the estate, §704(a)(1), and distributing the proceeds
to the debtor’s creditors, §726. Crucially, however, a
Chapter 7 estate does not include the wages a debtor
earns or the assets he acquires after the bankruptcy filing.
§541(a)(1). Thus, while a Chapter 7 debtor must forfeit
virtually all his prepetition property, he is able to make a
“fresh start” by shielding from creditors his postpetition
earnings and acquisitions.
   Chapter 13 works differently. A wholly voluntary alter­
native to Chapter 7, Chapter 13 allows a debtor to retain
                 Cite as: 575 U. S. ____ (2015)           3

                     Opinion of the Court

his property if he proposes, and gains court confirmation
of, a plan to repay his debts over a three- to five-year
period. §1306(b), §1322, §1327(b). Payments under a
Chapter 13 plan are usually made from a debtor’s “future
earnings or other future income.” §1322(a)(1); see 8 Col­
lier on Bankruptcy ¶1322.02[1] (A. Resnick & H. Sommer
eds., 16th ed. 2014). Accordingly, the Chapter 13 estate
from which creditors may be paid includes both the debt­
or’s property at the time of his bankruptcy petition, and
any wages and property acquired after filing. §1306(a). A
Chapter 13 trustee is often charged with collecting a
portion of a debtor’s wages through payroll deduction, and
with distributing the withheld wages to creditors.
   Proceedings under Chapter 13 can benefit debtors and
creditors alike. Debtors are allowed to retain their assets,
commonly their home or car. And creditors, entitled to a
Chapter 13 debtor’s “disposable” postpetition income,
§1325(b)(1), usually collect more under a Chapter 13
plan than they would have received under a Chapter 7
liquidation.
   Many debtors, however, fail to complete a Chapter 13
plan successfully. See Porter, The Pretend Solution: An
Empirical Study of Bankruptcy Outcomes, 90 Texas
L. Rev. 103, 107–111 (2011) (only one in three cases filed
under Chapter 13 ends in discharge). Recognizing that
reality, Congress accorded debtors a nonwaivable right to
convert a Chapter 13 case to one under Chapter 7 “at any
time.” §1307(a). To effectuate a conversion, a debtor need
only file a notice with the bankruptcy court. Fed. Rule
Bkrtcy. Proc. 1017(f)(3). No motion or court order is needed
to render the conversion effective. See ibid.
   Conversion from Chapter 13 to Chapter 7 does not
commence a new bankruptcy case. The existing case
continues along another track, Chapter 7 instead of Chap­
ter 13, without “effect[ing] a change in the date of the
filing of the petition.” §348(a). Conversion, however,
4                 HARRIS v. VIEGELAHN

                    Opinion of the Court

immediately “terminates the service” of the Chapter 13
trustee, replacing her with a Chapter 7 trustee. §348(e).
                             B
   In February 2010, petitioner Charles Harris III filed a
Chapter 13 bankruptcy petition. At the time of filing,
Harris was indebted to multiple creditors, and had fallen
$3,700 behind on payments to Chase Manhattan, his home
mortgage lender.
    Harris’ court-confirmed Chapter 13 plan provided that
he would immediately resume making monthly mortgage
payments to Chase. The plan further provided that $530
per month would be withheld from Harris’ postpetition
wages and remitted to the Chapter 13 trustee, respondent
Mary Viegelahn. Viegelahn, in turn, would distribute
$352 per month to Chase to pay down Harris’ outstanding
mortgage debt. She would also distribute $75.34 per
month to Harris’ only other secured lender, a consumer-
electronics store. Once those secured creditors were paid
in full, Viegelahn was to begin distributing funds to Har­
ris’ unsecured creditors.
   Implementation of the plan was short lived. Harris
again fell behind on his mortgage payments, and in No­
vember 2010, Chase received permission from the Bank­
ruptcy Court to foreclose on Harris’ home. Following the
foreclosure, Viegelahn continued to receive $530 per
month from Harris’ wages, but stopped making the pay­
ments earmarked for Chase. As a result, funds formerly
reserved for Chase accumulated in Viegelahn’s possession.
   On November 22, 2011, Harris exercised his statutory
right to convert his Chapter 13 case to one under Chapter
7. By that time, Harris’ postpetition wages accumulated
by Viegelahn amounted to $5,519.22. On December 1,
2011—ten days after Harris’ conversion—Viegelahn dis­
posed of those funds by giving $1,200 to Harris’ counsel,
paying herself a $267.79 fee, and distributing the remain­
                  Cite as: 575 U. S. ____ (2015)            5

                      Opinion of the Court

ing money to the consumer-electronics store and six of
Harris’ unsecured creditors.
   Asserting that Viegelahn lacked authority to disburse
funds to creditors once the case was converted to Chapter
7, Harris moved the Bankruptcy Court for an order direct­
ing refund of the accumulated wages Viegelahn had given
to his creditors. The Bankruptcy Court granted Harris’
motion, and the District Court affirmed.
   The Fifth Circuit reversed. In re Harris, 757 F.3d 468
(2014). Finding “little guidance in the Bankruptcy Code,”
id., at 478, the Fifth Circuit concluded that “considera­
tions of equity and policy” rendered “the creditors’ claim to
the undistributed funds . . . superior to that of the debtor,”
id., at 478, 481. Notwithstanding a Chapter 13 debtor’s
conversion to Chapter 7, the Fifth Circuit held, a former
Chapter 13 trustee must distribute a debtor’s accumulated
postpetition wages to his creditors.
   The Fifth Circuit acknowledged that its decision con­
flicted with the Third Circuit’s decision in In re Michael,
699 F.3d 305 (2012), which held that a debtor’s undistrib­
uted postpetition wages “are to be returned to the debtor
at the time of conversion [from Chapter 13 to Chapter 7].”
Id., at 307. We granted certiorari to resolve this conflict,
574 U. S. ___ (2014), and now reverse the Fifth Circuit’s
judgment.
                              II

                              A

   Prior to the Bankruptcy Reform Act of 1994, courts
divided three ways on the disposition of a debtor’s undis­
tributed postpetition wages following conversion of a
proceeding from Chapter 13 to Chapter 7. Some courts
concluded that undistributed postpetition wages reverted
to the debtor. E.g., In re Boggs, 137 B.R. 408, 411 (Bkrtcy.
Ct. WD Wash. 1992). Others ordered a debtor’s undis-
tributed postpetition earnings disbursed to creditors pur­
6                  HARRIS v. VIEGELAHN

                     Opinion of the Court

suant to the terms of the confirmed (albeit terminated)
Chapter 13 plan. E.g., In re Waugh, 82 B.R. 394, 400
(Bkrtcy. Ct. WD Pa. 1988). Still other courts, including
several Courts of Appeals, held that, upon conversion, all
postpetition earnings and acquisitions became part of the
new Chapter 7 estate, thus augmenting the property
available for liquidation and distribution to creditors.
E.g., In re Calder, 973 F.2d 862, 865–866 (CA10 1992); In
re Lybrook, 951 F.2d 136, 137 (CA7 1991).
  Congress addressed the matter in 1994 by adding
§348(f) to the Bankruptcy Code. Rejecting the rulings of
several Courts of Appeals, §348(f)(1)(A) provides that in a
case converted from Chapter 13, a debtor’s postpetition
earnings and acquisitions do not become part of the new
Chapter 7 estate:
    “[P]roperty of the [Chapter 7] estate in the converted
    case shall consist of property of the estate, as of the
    date of filing of the [initial Chapter 13] petition, that
    remains in the possession of or is under the control of
    the debtor on the date of conversion.”
In §348(f)(2), Congress added an exception for debtors who
convert in bad faith:
    “If the debtor converts a case [initially filed] under
    chapter 13 . . . in bad faith, the property of the estate
    in the converted case shall consist of the property of
    the estate as of the date of the conversion.”
  Section 348(f), all agree, makes one thing clear: A debt­
or’s postpetition wages, including undisbursed funds in
the hands of a trustee, ordinarily do not become part of the
Chapter 7 estate created by conversion. Absent a bad-
faith conversion, §348(f) limits a converted Chapter 7
estate to property belonging to the debtor “as of the date”
the original Chapter 13 petition was filed. Postpetition
wages, by definition, do not fit that bill.
                 Cite as: 575 U. S. ____ (2015)            7

                     Opinion of the Court 

                              B

   With this background, we turn to the question presented:
What happens to postpetition wages held by a Chapter
13 trustee at the time the case is converted to Chapter 7?
Does the Code require return of the funds to the debtor, or
does it require their distribution to creditors? We con­
clude that postpetition wages must be returned to the
debtor.
   By excluding postpetition wages from the converted
Chapter 7 estate, §348(f)(1)(A) removes those earnings
from the pool of assets that may be liquidated and distrib­
uted to creditors. Allowing a terminated Chapter 13
trustee to disburse the very same earnings to the very
same creditors is incompatible with that statutory design.
We resist attributing to Congress, after explicitly exempt­
ing from Chapter 7’s liquidation-and-distribution process a
debtor’s postpetition wages, a plan to place those wages in
creditors’ hands another way.
   Section 348(f)(2)’s exception for bad-faith conversions is
instructive in this regard. If a debtor converts in bad
faith—for example, by concealing assets in “unfair manip­
ulation of the bankruptcy system,” In re Siegfried, 219
B.R. 581, 586 (Bkrtcy. Ct. Colo. 1998)—the converted
Chapter 7 estate “consist[s] of the property of the [Chapter
13] estate as of the date of conversion.” §348(f)(2) (empha­
sis added). Section 348(f)(2) thus penalizes bad-faith
debtors by making their postpetition wages available for
liquidation and distribution to creditors. Conversely,
when the conversion to Chapter 7 is made in good faith, no
penalty is exacted. Shielding a Chapter 7 debtor’s post-
petition earnings from creditors enables the “honest but
unfortunate debtor” to make the “fresh start” the Bank­
ruptcy Code aims to facilitate. Marrama, 549 U.S., at 367
(internal quotation marks omitted). Bad-faith conversions
apart, we find nothing in the Code denying debtors funds
that would have been theirs had the case proceeded under
8                  HARRIS v. VIEGELAHN

                     Opinion of the Court

Chapter 7 from the start. In sum, §348(f) does not say,
expressly: On conversion, accumulated wages go to the
debtor. But that is the most sensible reading of what
Congress did provide.
   Section 348(e) also informs our ruling that undistrib­
uted postpetition wages must be returned to the debtor.
That section provides: “Conversion [from Chapter 13 to
Chapter 7] terminates the service of [the Chapter 13]
trustee.” A core service provided by a Chapter 13 trustee
is the disbursement of “payments to creditors.” §1326(c)
(emphasis added). The moment a case is converted from
Chapter 13 to Chapter 7, however, the Chapter 13 trustee
is stripped of authority to provide that “service.” §348(e).
   Section 348(e), of course, does not require a terminated
trustee to hold accumulated funds in perpetuity; she must
(as we hold today) return undistributed postpetition wages
to the debtor. Returning funds to a debtor, however, is not
a Chapter 13 trustee service as is making “paymen[t] to
creditors.” §1326(c). In this case, illustratively, Chapter
13 trustee Viegelahn continued to act in that capacity
after her tenure ended. Eight days after the case was
converted to Chapter 7, she filed with the Bankruptcy
Court a document titled “Trustee’s Recommendations
Concerning Claims,” recommending distribution of the
funds originally earmarked for Chase to the remaining
secured creditor and six of the 13 unsecured creditors. No.
10–50655 (Bkrtcy. Ct. WD Tex., Nov. 30, 2011), Doc. 34.
She then acted on that recommendation. She thus provided
a Chapter 13 trustee “service,” although barred from
doing so by §348(e). Returning undistributed wages to the
debtor, in contrast, renders no Chapter 13-authorized
“service.”
                           C
  Viegelahn cites two Chapter 13 provisions in support of
her argument that the Bankruptcy Code requires a termi­
                 Cite as: 575 U. S. ____ (2015)            9

                     Opinion of the Court

nated Chapter 13 trustee “to distribute undisbursed funds
to creditors.” Brief for Respondent 21. The first, §1327(a),
provides that a confirmed Chapter 13 plan “bind[s] the
debtor and each creditor.” The second, §1326(a)(2), in­
structs a trustee to distribute “payment[s] in accordance
with the plan,” and that, Viegelahn observes, is just
what she did. But the cited provisions had no force here,
for they ceased to apply once the case was converted to
Chapter 7.
  When a debtor exercises his statutory right to convert,
the case is placed under Chapter 7’s governance, and no
Chapter 13 provision holds sway. §103(i) (“Chapter 13 . . .
applies only in a case under [that] chapter.”). Harris
having converted the case, the Chapter 13 plan was no
longer “bind[ing].” §1327(a). And Viegelahn, by then the
former Chapter 13 trustee, lacked authority to distribute
“payment[s] in accordance with the plan.” §1326(a)(2); see
§348(e).
  Nor can we credit the suggestion that a confirmed Chap­
ter 13 plan gives creditors a vested right to funds held by a
trustee. “[N]o provision in the Bankruptcy Code classifies
any property, including post-petition wages, as belonging
to creditors.” Michael, 699 F.3d, at 312–313.
  Viegelahn alternatively urges that a terminated Chap­
ter 13 trustee’s “duty” to distribute funds to creditors is a
facet of the trustee’s obligation to “wind up” the affairs of
the Chapter 13 estate following conversion. Brief for
Respondent 25 (internal quotation marks omitted). The
Federal Rules of Bankruptcy Procedure, however, specify
what a terminated Chapter 13 trustee must do post-
conversion: (1) she must turn over records and assets to
the Chapter 7 trustee, Rule 1019(4); and (2) she must file
a report with the United States bankruptcy trustee, Rule
1019(5)(B)(ii). Continuing to distribute funds to creditors
pursuant to the defunct Chapter 13 plan is not an author­
ized “wind-up” task.
10                 HARRIS v. VIEGELAHN

                     Opinion of the Court

   Finally, Viegelahn homes in on a particular feature of
this case. Section 1327(b) states that “[e]xcept as other­
wise provided in the [Chapter 13] plan . . . the confirma­
tion of a plan vests all of the property of the estate in the
debtor.” Harris’ plan “otherwise provided”: It stated that
“[u]pon confirmation of the plan, all property of the estate
shall not vest in the Debto[r], but shall remain as property
of the estate.” App. 31 (emphasis added). That plan lan­
guage does not change the outcome here. Harris’ wages
may have been “property of the estate” while his case
proceeded under Chapter 13, but estate property does not
become property of creditors until it is distributed to them.
See Michael, 699 F.3d, at 313. Moreover, the order con­
firming Harris’ plan provided that upon conversion to
Chapter 7, “[s]uch property as may revest in the debtor
shall so revest.” App. 48. Pursuant to that provision,
property formerly in the Chapter 13 estate that did not
become part of the Chapter 7 estate revested in Harris;
here, Harris’ postpetition wages so revested.
                               D
  The Fifth Circuit expressed concern that debtors would
receive a “windfall” if they could reclaim accumulated
wages from a terminated Chapter 13 trustee. 757 F.3d, at
478–481. As explained, however, see supra at 2–3, Chap­
ter 13 is a voluntary proceeding in which debtors endeavor
to discharge their obligations using postpetition earnings
that are off-limits to creditors in a Chapter 7 proceeding.
We do not regard as a “windfall” a debtor’s receipt of a
fraction of the wages he earned and would have kept had
he filed under Chapter 7 in the first place.
  We acknowledge the “fortuit[y],” as the Fifth Circuit
called it, that a “debtor’s chance of having funds returned”
is “dependent on the trustee’s speed in distributing the
payments” to creditors. 757 F.3d, at 479, and n. 10. A
trustee who distributes payments regularly may have
                 Cite as: 575 U. S. ____ (2015)                 11

                     Opinion of the Court

little or no accumulated wages to return. When a trustee
distributes payments infrequently, on the other hand, a
debtor who converts to Chapter 7 may be entitled to a
sizable refund. These outcomes, however, follow directly
from Congress’ decisions to shield postpetition wages from
creditors in a converted Chapter 7 case, §348(f)(1)(A), and
to give Chapter 13 debtors a right to convert to Chapter 7
“at any time,” §1307(a). Moreover, creditors may gain
protection against the risk of excess accumulations in the
hands of Chapter 13 trustees by seeking to include in a
Chapter 13 plan a schedule for regular disbursement of
funds the trustee collects.
                        *   *        *
  For the reasons stated, the       judgment of the United
States Court of Appeals for the     Fifth Circuit is reversed,
and the case is remanded for        further proceedings con­
sistent with this opinion.
                                                  It is so ordered.