The principal purpose of the Bankruptcy Code is to grant a ‘‘‘fresh start’’’ to the ‘‘‘honest but unfortunate debtor.’’’ [Citation.] Both Chapter 7 and Chapter 13 of the Code permit an insolvent individual to discharge certain unpaid debts toward that end. Chapter 7 authorizes a discharge of prepetition debts following the liquidation of the debtor’s assets by a bankruptcy trustee, who then distributes the proceeds to creditors. Chapter 13 authorizes an individual with regular income to obtain a discharge after the successful completion of a payment plan approved by the bankruptcy court. Under Chapter 7 the debtor’s non-exempt assets are controlled by the bankruptcy trustee; under Chapter 13 the debtor retains possession of his property. A proceeding that is commenced under Chapter 7 may be converted to a Chapter 13 proceeding and vice versa. §§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 right to obtain Chapter 13 relief. The issue may arise at the outset of a Chapter 13 case in response to a motion by creditors or by the United States trustee either to dismiss the case or to convert it to Chapter 7, see §1307(c). It also may arise in a Chapter 7 case when a debtor files a motion under §706(a) to convert to Chapter 13. In the former context, despite the absence of any statutory provision specifically addressing the issue, the federal courts are virtually unanimous that prepetition bad-faith conduct may cause a forfeiture of any right to proceed with a Chapter 13 case. In the latter context, however, some courts have suggested that even a bad-faith debtor has an absolute right to convert at least one Chapter 7 proceeding into a Chapter 13 case even though the case will thereafter be dismissed or immediately returned to Chapter 7. We granted certiorari to decide whether the Code mandates that procedural anomaly. [Citation.]

   On March 11, 2003, petitioner, Robert Marrama, filed a voluntary petition under Chapter 7, thereby creating an estate consisting of all his property ‘‘wherever located and by whomever held.’’ §541(a). Respondent Mark DeGiacomo is the trustee of that estate. Respondent Citizens Bank of Massachusetts (hereinafter Bank) is the principal creditor.

   In verified schedules attached to his petition, Marrama made a number of statements about his principal asset, a house in Maine, that were misleading or inaccurate. For instance, while he disclosed that he was the sole beneficiary of the trust that owned the property, he listed its value as zero. He also denied that he had transferred any property other than in the ordinary course of business during the year preceding the filing of his petition. Neither statement was true. In fact, the Maine property had substantial value, and Marrama had transferred it into the newly created trust for no consideration seven months prior to filing his Chapter 13 petition. Marrama later admitted that the purpose of the transfer was to protect the property from his creditors.

   After Marrama’s examination at the meeting of creditors, see §341, the trustee advised Marrama’s counsel that he intended to recover the Maine property as an asset of the estate. Thereafter, Marrama filed ***a motion to convert [to Chapter 13], to which both the trustee and the Bank filed objections. Relying primarily on Marrama’s attempt to conceal the Maine property from his creditors, the trustee contended that the request to convert was made in bad faith and would constitute an abuse of the bankruptcy process. The Bank opposed the conversion on similar grounds.

   * * * The Bankruptcy Judge rejected [the debtor’s] arguments, ruling that * * * the facts established a ‘‘bad faith’’ case. [Citation.] The judge denied the request for conversion.

   Marrama’s principal argument on appeal to the Bankruptcy Appellate Panel for the First Circuit was that he had an absolute right to convert his case from Chapter 7 to Chapter 13 under the plain language of §706(a) of the Code. The panel affirmed the decision of the Bankruptcy Court. * * *

   On appeal from the panel, the Court of Appeals for the First Circuit also rejected the argument that §706(a) gives a Chapter 7 debtor an absolute right to convert to Chapter 13. * * *

   While other Courts of Appeals and bankruptcy appellate panels have refused to recognize any ‘‘bad faith’’ exception to the conversion right created by §706(a), we conclude that the courts in this case correctly held that Marrama forfeited his right to proceed under Chapter 13.

***

   The class of honest but unfortunate debtors who do possess an absolute right to convert their cases from Chapter 7 to Chapter 13 includes the vast majority of the hundreds of thousands of individuals who file Chapter 7 petitions each year. Congress sought to give these individuals the chance to repay their debts should they acquire the means to do so. Moreover, as the Court of Appeals observed, the reference in §706(a) to the unenforceability of a waiver of the right to convert functions ‘‘as a consumer protection provision against adhesion contracts, whereby a debtor’s creditors might be precluded from attempting to prescribe a waiver of the debtor’s right to convert to chapter 13 as a non-negotiable condition of its contractual agreements.’’ [Citation.]

   A statutory provision protecting a borrower from waiver is not a shield against forfeiture. Nothing in the text of either §706 or §1307(c) (or the legislative history of either provision) limits the authority of the court to take appropriate action in response to fraudulent conduct by the atypical litigant who has demonstrated that he is not entitled to the relief available to the typical debtor. On the contrary, the broad authority granted to bankruptcy judges to take any action that is necessary or appropriate ‘‘to prevent an abuse of process’’ described in §105(a) of the Code, is surely adequate to authorize an immediate denial of a motion to convert filed under §706 in lieu of a conversion order that merely postpones the allowance of equivalent relief and may provide a debtor with an opportunity to take action prejudicial to creditors.

***

   Accordingly, the judgment of the Court of Appeals is affirmed.

   It is so ordered.