diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index 62f0f53b01..ba11933b91 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -3856,16 +3856,19 @@ bool CWallet::MigrateToSQLite(bilingual_str& error)
 
     // Close this database and delete the file
     fs::path db_path = fs::PathFromString(m_database->Filename());
-    fs::path db_dir = db_path.parent_path();
     m_database->Close();
     fs::remove(db_path);
 
+    // Generate the path for the location of the migrated wallet
+    // Wallets that are plain files rather than wallet directories will be migrated to be wallet directories.
+    const fs::path wallet_path = fsbridge::AbsPathJoin(GetWalletDir(), fs::PathFromString(m_name));
+
     // Make new DB
     DatabaseOptions opts;
     opts.require_create = true;
     opts.require_format = DatabaseFormat::SQLITE;
     DatabaseStatus db_status;
-    std::unique_ptr<WalletDatabase> new_db = MakeDatabase(db_dir, opts, db_status, error);
+    std::unique_ptr<WalletDatabase> new_db = MakeDatabase(wallet_path, opts, db_status, error);
     assert(new_db); // This is to prevent doing anything further with this wallet. The original file was deleted, but a backup exists.
     m_database.reset();
     m_database = std::move(new_db);
diff --git a/test/functional/wallet_migration.py b/test/functional/wallet_migration.py
index c6c2af10b1..320f5dd9df 100755
--- a/test/functional/wallet_migration.py
+++ b/test/functional/wallet_migration.py
@@ -6,6 +6,7 @@
 
 import os
 import random
+import shutil
 from test_framework.descriptors import descsum_create
 from test_framework.test_framework import BitcoinTestFramework
 from test_framework.util import (
@@ -470,6 +471,40 @@ class WalletMigrationTest(BitcoinTestFramework):
 
         assert_equal(bals, wallet.getbalances())
 
+    def test_default_wallet(self):
+        self.log.info("Test migration of the wallet named as the empty string")
+        wallet = self.create_legacy_wallet("")
+
+        wallet.migratewallet()
+        info = wallet.getwalletinfo()
+        assert_equal(info["descriptors"], True)
+        assert_equal(info["format"], "sqlite")
+
+    def test_direct_file(self):
+        self.log.info("Test migration of a wallet that is not in a wallet directory")
+        wallet = self.create_legacy_wallet("plainfile")
+        wallet.unloadwallet()
+
+        wallets_dir = os.path.join(self.nodes[0].datadir, "regtest", "wallets")
+        wallet_path = os.path.join(wallets_dir, "plainfile")
+        wallet_dat_path = os.path.join(wallet_path, "wallet.dat")
+        shutil.copyfile(wallet_dat_path, os.path.join(wallets_dir, "plainfile.bak"))
+        shutil.rmtree(wallet_path)
+        shutil.move(os.path.join(wallets_dir, "plainfile.bak"), wallet_path)
+
+        self.nodes[0].loadwallet("plainfile")
+        info = wallet.getwalletinfo()
+        assert_equal(info["descriptors"], False)
+        assert_equal(info["format"], "bdb")
+
+        wallet.migratewallet()
+        info = wallet.getwalletinfo()
+        assert_equal(info["descriptors"], True)
+        assert_equal(info["format"], "sqlite")
+
+        assert os.path.isdir(wallet_path)
+        assert os.path.isfile(wallet_dat_path)
+
     def run_test(self):
         self.generate(self.nodes[0], 101)
 
@@ -482,6 +517,8 @@ class WalletMigrationTest(BitcoinTestFramework):
         self.test_encrypted()
         self.test_unloaded()
         self.test_unloaded_by_path()
+        self.test_default_wallet()
+        self.test_direct_file()
 
 if __name__ == '__main__':
     WalletMigrationTest().main()