In Re Michael: funds acquired by the debtor for eventual disbursement to creditors by the Chapter 13 Trustee must be returned to debtor at the time of conversion

On October 26, 2012 the 3rd Circuit held in the case of In Re Michael, No. 11- 1992, that when a debtor converts their case from Chapter 13 (Adjustment of debts) to a Chapter 7 (Liquidation of Assets), funds acquired by the debtor for eventual disbursement to creditors by the Chapter 13 Trustee must be returned to debtor at the time of conversion. In other words, if the Chapter 13 Trustee is holding funds contributed by the debtor, those funds must be returned to the debtor upon conversion of the case to Chapter 7, instead of being disbursed to creditors. In Re Michael (3rd Circuit)