§ 106.1     In General
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 106.1, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

The Code invites debtors to use Chapter 13 to manage the effects of prepetition misconduct. Chapter 13 allows an eligible individual to discharge many debts that would be nondischargeable in a Chapter 7 case.1 That Chapter 13 debtors propose to compromise claims that would be nondischargeable in a Chapter 7 case is consistent with the statutory scheme and demonstrates that counsel has done what Congress contemplated—informed the debtor of the advantages of Chapter 13.2

[2]

Nothing in Chapter 13 specifically addresses, much less precludes, confirmation of a plan that deals with claims that are or might be nondischargeable in a Chapter 7 case. If Congress intended to stop debtors from filing Chapter 13 to manage a claim that would be nondischargeable in a Chapter 7 case, there would be a bar to eligibility and to conversion worded in terms of the nature of claims against the debtor. Instead, a Chapter 7 debtor has an absolute right to convert to Chapter 13 (unless the debtor has previously converted from another chapter).3 11 U.S.C. § 1328(a) unambiguously permits Chapter 13 debtors to discharge claims that would be nondischargeable in a Chapter 7 case.4 The design of the Code supports the argument that the management and discharge of claims that would be nondischargeable in a Chapter 7 case is mainstream Chapter 13 practice—a use of Chapter 13 consistent with congressional intent and not bounded any more or less than other uses by the good-faith test for confirmation.5

[3]

One way to look at the countless good-faith cases analyzing plans that compromise nondischargeable claims is that the courts just don’t like the flexibility Congress granted Chapter 13 debtors to deal with their own prepetition misconduct. In hundreds of reported decisions, courts up and down the appellate ladders have taken the good-faith test and beaten it to fit one perception or another of what Congress didn’t do: limit the management of nondischargeable claims in Chapter 13 cases. Too many hits has rendered good faith senseless in this context.

[4]

Another way to look at these cases is that the broad grant of discretion in the use of good faith as a confirmation standard demands case-by-case analysis and differences of judgment are inevitable. Plans that aggressively manage nondischargeable claims are a crapshoot: at confirmation, the good-faith test will turn on nuances that aren’t predictable from what this judge or other judges did in other cases. In some other legal cultures, this is not a bad outcome. In ours, uncertainty, by statute, is discomforting.

[5]

And so the judges keep writing about good faith and nondischargeable claims. The chronicle of the reported decisions that follows organizes a little without delivering much insight. Maturity in this context would be measured by a decline in published opinions on this subject.

[6]

It is common for debtors to convert to Chapter 13 after losing a discharge or dischargeability battle in a Chapter 7 case. Many courts have concluded that conversion to Chapter 13 after defeat (or when defeat is likely) in discharge or dischargeability litigation is relevant to good faith at confirmation but not conclusive of bad faith.6 There are many reported decisions confirming Chapter 13 plans over a good-faith objection when the plan pays less than 100 percent of claims that are or might be nondischargeable in a Chapter 7 case.7 At least as many decisions refuse confirmation of plans that compromise claims that are or might be nondischargeable in a Chapter 7 case.8 Especially in decisions reported from the Eighth Circuit, it appears that some nondischargeable debts are “worse” than others and thus throw more weight in good-faith analysis.9

[7]

Even a superficial review of the cases reveals that very similar facts have produced irreconcilably different outcomes in good-faith analysis within and across judicial districts, when the debtor’s plan compromises claims that are or might be nondischargeable in a Chapter 7 case. Could Congress have intended the confirmation of Chapter 13 plans to turn on the “difference” between aggravated assault and premeditated murder?10 The absence of discernible rules or patterns is both an invitation to continued litigation and proof that creditors and debtors are almost always better off to settle good-faith objections involving nondischargeable claims. There is no reason to expect this picture to change.


 

1  See § 344.1 [ Broadest Discharge Available ] § 157.1  Broadest Discharge Available.

 

2  See § 4.9 [ Discharge or Dischargeability Problems ] § 8.11  Discharge or Dischargeability Problems.

 

3  11 U.S.C. § 706(a). See § 325.1 [ Absolute Right of Debtor? ] § 148.2  Absolute Right of Debtor?.

 

4  See § 344.1 [ Broadest Discharge Available ] § 157.1  Broadest Discharge Available.

 

5  See Keach v. Boyajian (In re Keach), 243 B.R. 851, 870–71 (B.A.P. 1st Cir. 2000) (“[I]t was error for the bankruptcy judge to treat as an indicator of bad faith the proposed discharge of debt which was nondischargeable in the Debtor’s Chapter 7 case. Congress has spoken clearly in Section 1328 by providing for the discharge of debt deemed not dischargeable in Chapter 7. No judge may override Congress’s decision to do so, regardless of the judge’s distaste in participating in the discharge of a debt immorally incurred. Right and wrong are the province of judges, but only within the parameters set by the legislative branch.”); Berard Indus., Inc. v. Daniel (In re Daniel), No. Civ. A. 00CV12174GAO, 2002 WL 1046695, at *2 (D. Mass. May 22, 2002) (unpublished) (“The Bankruptcy Judge correctly concluded that any fraud in connection with the debt underlying the state court judgment is irrelevant to the determination of whether or not her Chapter 13 bankruptcy petition was filed in good faith.”); In re Lapin, 302 B.R. 184, 191 (Bankr. S.D. Tex. 2003) (Applying In re Chaffin, 816 F.2d 1070 (5th Cir. 1987), modified by, 836 F.2d 215 (5th Cir. 1988), plan that compromises multimillion-dollar claims for securities fraud and a Ponzi scheme is proposed in good faith. “In Chaffin 2, the Fifth Circuit indicated that the Debtor’s pre-bankruptcy mindset is only relevant if the debtor intended to seek a chapter 13 discharge at the time of the fraud. Otherwise, it is only post-petition intent and purpose that is considered. A more expansive explanation is in In re Keach, 243 B.R. 851 (1st Cir. BAP 2000).”); In re Letsche, 234 B.R. 208 (Bankr. D. Mass. 1999) (Citing In re Lilley, 91 F.3d 491 (3d Cir. 1996), as interpreted in In re Goddard, 212 B.R. 233 (D.N.J. 1997), court disregards nondischargeable nature of large claim by the debtor’s mother in reaching conclusion that plan was not proposed in good faith.).

 

6  Hardin v. Caldwell (In re Caldwell), 895 F.2d 1123 (6th Cir. 1990) (Nondischargeable judgment in preconversion Chapter 7 case is not conclusive of bad faith, but bad faith is found where unbroken pattern of deceit and delay by the debtor proves the absence of any genuine effort to pay the nondischargeable judgment.); Mason v. Young (In re Young), 237 B.R. 791, 799 (B.A.P. 10th Cir. 1999) (After conversion from Chapter 7 to Chapter 13, BAP affirms rejection of good-faith objection to confirmation of 4%, 60-month plan that compromises $300,000 judgment for punitive damages for violation of civil rights and wrongful discharge. “[A]n attempt to discharge a debt in a Chapter 13 case that is not dischargeable in a Chapter 7 is not per se bad faith unless combined with other factors that show an overall effort to avoid paying creditors. . . . [T]he bankruptcy court found that Young originally filed for Chapter 7 because he did not have employment with sufficient compensation to allow him to fund a feasible Chapter 13 plan. Once Young acquired a higher paying job, he converted to Chapter 13. . . . [T]he bankruptcy court found Young credible.”), aff’d on other grounds, 237 F.3d 1168, 1177–78 (10th Cir. 2001) (“[W]e are also mindful that ‘a Chapter 13 plan may be confirmed despite even the most egregious pre-filing conduct where other factors suggest that the plan nevertheless represents a good faith effort by the debtor to satisfy his creditors’ claims.’ . . . The policy of allowing a fresh start does not license debtors to lightly rid themselves of the burden of their indebtedness without an honest attempt at repayment. Yet neither does that policy compel debtors, in Dickensian fashion, to labor for the rest of their lives under the crushing weight of gigantic debt; under our law, the world is not to be made a debtor’s prison by a lifelong sentence of penury.”); Street v. Lawson (In re Street), 55 B.R. 763, 765 (B.A.P. 9th Cir. 1985) (“A conversion from Chapter 7 to Chapter 13 following an adverse decision on a dischargeability action is not a ‘manipulation of the Bankruptcy Code.’”); In re Cavaliere, 238 B.R. 247, 249 (Bankr. W.D.N.Y. 1999) (Not bad faith that debtor converted Chapter 7 case to Chapter 13 before discharge and after the filing of a dischargeability complaint by a credit card lender. “Any assertion of nondischargeability is yet unproven. Thus, for Cavaliere, Chapter 13 works not to avoid a debt that is acknowledged to be nondischargeable in Chapter 7, but to avoid the costs of litigation with respect to that issue. In the view of this court, such is a proper use of Chapter 13 and one which the debtor may properly employ in good faith.”); In re McCall, 199 B.R. 173 (Bankr. E.D. Ark. 1996) (Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990), requires the bankruptcy court to consider factors to determine the good faith of a Chapter 13 debtor who converted from Chapter 7 one month after the bankruptcy court declared a large credit card debt nondischargeable. Bad faith where debtors’ plan would “redeem” property for the debtors without paying unsecured claim holders in full.); In re Pickering, 195 B.R. 759 (Bankr. D. Mont. 1996) (In re Warren, 89 B.R. 87 (B.A.P. 9th Cir. 1988), requires the bankruptcy court to consider many factors in assessing good faith in a Chapter 13 case filed after discharge but while a prior Chapter 7 case is still pending, in which the plan proposes to compromise the major debt declared nondischargeable in the Chapter 7 case. Analysis of all factors demonstrates that the debtor “lacks requisite sincerity in seeking Chapter 13 relief.”); In re Farrington, 129 B.R. 271 (Bankr. M.D. Fla. 1991) (Filing a Chapter 13 case while a Chapter 7 case is pending, to deal with claims that survived discharge in prior Chapter 7 case, is not per se prohibited by the Code, but it is a factor in the totality-of-circumstances determination for good-faith purposes.); In re Dotson, 124 B.R. 836 (Bankr. N.D. Okla. 1991) (That debtor converted to Chapter 13 from Chapter 7 after the filing of a dischargeability complaint was one factor leading to denial of confirmation based on lack of good faith.); In re Sieg, 120 B.R. 533 (Bankr. D.N.D. 1990) (Conversion from Chapter 7 to Chapter 13 to deal with student loan claims that are nondischargeable in the Chapter 7 case is not per se bad faith but is a factor to consider in the good-faith analysis.); In re Bush, 120 B.R. 403 (Bankr. E.D. Tex. 1990) (Debtor pleaded guilty to embezzlement and consented to determination of nondischargeability prior to conversion from Chapter 7 to Chapter 13; although discharge of a claim that would be nondischargeable in a Chapter 7 case is not outcome determinative, it is “a legitimate area of inquiry and concern.”); In re Makarchuk, 76 B.R. 919, 923 (Bankr. N.D.N.Y. 1987) (Conversion to Chapter 13 after determination of nondischargeability of student loans in Chapter 7 case is not alone bad faith, but confirmation is denied when the Chapter 13 plan has as its “primary or principal purpose the discharge of otherwise nondischargeable student loan debt.”); In re Caldwell, 67 B.R. 296 (Bankr. E.D. Tenn. 1986) (Plan was not proposed in bad faith simply because it proposes to deal with nondischargeable debts from preconversion Chapter 7.); In re Parameswaran, 64 B.R. 341 (Bankr. S.D.N.Y. 1986) (Conversion from Chapter 7 to Chapter 13 is permitted notwithstanding successful objection to discharge in Chapter 7 case.); In re McMonagle, 30 B.R. 899 (Bankr. D.S.D. 1983) (Court confirms plan compromising debt declared nondischargeable in Chapter 7 case converted to Chapter 13.).

 

7  In re Smith, 286 F.3d 461, 467–68 (7th Cir. 2002) (Rejects good-faith challenge to plan that pays 10% of $267,000 debt for prepetition fraud that was declared nondischargeable in prior Chapter 7 case. “‘Under a “totality of the circumstances” test, a debts nondischargeability under Chapter 7 arising from a debtor’s prefiling conduct is relevant to the debtor’s good faith.’ . . . Although the nature of the underlying debt, not dischargeable in Chapter 7, weighs against a finding of good faith, this factor alone cannot defeat confirmation.”); Ed Schory & Sons, Inc. v. Francis (In re Francis), 273 B.R. 87, 92–95 (B.A.P. 6th Cir. 2002) (Affirms confirmation of plan paying 2% or 3% of $229,000 claim declared nondischargeable in prior Chapter 7 case. “The Sixth Circuit has stated that bankruptcy courts should not approve chapter 13 plans that are nothing more than ‘veiled’ chapter 7 plans. . . . A ‘veiled’ chapter 7 plan has not been defined. . . . More instructive . . . is the Sixth Circuit’s direction that a chapter 13 plan which proposes to pay only a small portion of a debt that could not be discharged in a chapter 7 deserves particular scrutiny. . . . Francis did not immediately file bankruptcy . . . . Francis made significant voluntary payments on the judgment. . . . The length of Francis’s plan is the maximum permitted . . . . All of Francis’s disposable income is committed . . . Francis will never be able to pay off the full amount of the debt owed to Schory.”), aff’d, No. 02-3288, 2003 WL 21782600 (6th Cir. July 31, 2003) (unpublished); Mason v. Young (In re Young), 237 F.3d 1168, 1177–78 (10th Cir. 2001) (Rejects good-faith objection to 60-month plan that would compromise $300,000 jury verdict for civil rights violations that would probably be nondischargeable in a Chapter 7 case. Distinguishing Pioneer Bank v. Rasmussen (In re Rasmussen), 888 F.2d 703 (10th Cir. 1989), “[h]ere, by contrast, there was ample evidence before the bankruptcy court that the Chapter 13 plan was not filed for the purpose of evading Young’s debt to Mason. First, Young’s monthly payments under the plan were far higher than the de minimis $50 paid by the debtor in Pioneer Bank. Second, there were a number of other creditors to be satisfied under Young’s plan . . . . Third, the Chapter 13 plan in Pioneer Bank was for the minimum thirty-six month term, whereas the instant plan stretches over the maximum term allowed by the Bankruptcy Code. . . . [T]here is no strong evidence that Young was not above board about his disposable income.”); In re Day, No. 98-3182, 1999 WL 96117, at *4 (7th Cir. Feb. 17, 1999) (Table decision at 172 F.3d 52) (Overrules good-faith objection to .4% plan that compromises $100,000 judgment for aggravated battery. “No evidence suggests clear error in the bankruptcy court’s finding that Day’s plan represented a sincere effort at repayment given Day’s meager [$1,050 per month] income.”); Robinson v. Tenantry (In re Robinson), 987 F.2d 665 (10th Cir. 1993) (rejecting good-faith objection to plan managing claim against pastoral counselor for sexual misconduct); In re Chaffin, 816 F.2d 1070 (5th Cir. 1987) (securities fraud); Neufeld v. Freeman, 794 F.2d 149 (4th Cir. 1986) (Compromise of obligation that would be nondischargeable in Chapter 7 is not alone bad faith.); Wisconsin Higher Educ. Corp. v. Bear, 789 F.2d 577 (7th Cir. 1986) (student loans); Keach v. Boyajian (In re Keach), 243 B.R. 851, 870 (B.A.P. 1st Cir. 2000) (“[I]t was error for the bankruptcy judge to treat as an indicator of bad faith the proposed discharge of debt which was nondischargeable in the Debtor’s Chapter 7 case.” BAP reverses denial of confirmation of amended plan that paid 5% to a defrauded creditor with a claim exceeding $180,000.); Smyrnos v. Padilla (In re Padilla), 213 B.R. 349 (B.A.P. 9th Cir. 1997) (Bankruptcy court was not clearly erroneous in rejecting good-faith objection to 4% plan filed three months after judgment under § 523(a)(6) in prior Chapter 7 case.); Bayer v. Hill (In re Bayer), 210 B.R. 794, 795–96 (B.A.P. 8th Cir. 1997) (Bankruptcy court inappropriately decided good faith against the debtor based on allegations of assault and sexual battery that were the subject of state court litigation interrupted by the Chapter 13 filing. “The bankruptcy court considered only the unanswered allegations of Ms. Hill’s state court lawsuit. There has never been any hearing or presentation of evidence with respect to her charges. . . . [A]bsent an adjudication of culpability by the state court of competent jurisdiction, the bankruptcy court must hold an evidentiary hearing to determine if Ms. Hill’s allegations against the Debtor have a basis in fact.”); In re Porter, 102 B.R. 773 (B.A.P. 9th Cir. 1989) (45–50% plan compromising student loans); United States v. Smith (In re Smith), 199 B.R. 56, 59–60 (N.D. Okla. 1996) (Affirms confirmation of plan that discharges a $130,516.22 debt that survived discharge in a prior Chapter 7 case. “[T]he Bankruptcy Court presided over the prior Chapter 7 filing, and consequently was aware of the details related to the discharge/non-discharge of Appellees’ debts in that prior proceeding. . . . [T]he Court cannot conclude that the Bankruptcy Court’s determination that Appellee was acting in good faith is clearly erroneous.”); Colorado Student Obligation Bond Auth. v. Thompson (In re Thompson), 116 B.R. 794 (D. Colo. 1990) (2% plan when 70% of debt is student loans); Holiday v. Tennessee Student Assistance Corp. (In re Holiday), 75 B.R. 265 (M.D. Tenn. 1986) (student loans); In re Lapin, 302 B.R. 184, 191 (Bankr. S.D. Tex. 2003) (Applying In re Chaffin, 816 F.2d 1070 (5th Cir. 1987), modified by, 836 F.2d 215 (5th Cir. 1988), plan that compromises multi-million dollar claims for securities fraud and a Ponzi scheme is proposed in good faith: debtor was “forthcoming with exhaustive discovery,” the debtor committed to liquidate substantial exempt assets and plan provides that trustee may seek modification if debtor’s income increases.); In re Parks, 286 B.R. 670, 671–72 (Bankr. C.D. Ill. 2001) (“With the exception of the fact that the debt to CEFCU might be nondischargeable in a Chapter 7 case in bankruptcy, there was no evidence presented from which this Court could find that any of the other factors, showing bad faith, are present in this case. . . . [T]hat the debt to CEFCU might be a nondischargeable debt . . . is only one of several factors in determining good faith.”); In re Ochs, 283 B.R. 135, 139–40 (Bankr. E.D.N.Y. 2002) (“Cases which find that the existence of one debt is sufficient to make a finding that the debtor in question violated section 1325(a)(3) usually concern a debt that dwarfs the other unsecured debts and which involves criminal conduct. . . . [T]here has been no finding that the Debtor fraudulently induced Kellogg to ship goods to Thrift Mart with the intention of never repaying Kellogg, or that the filing of this petition is all part of a scheme by the Debtor to dispose of one of his largest obligations.”); In re White, 273 B.R. 279, 283 (Bankr. M.D. Fla. 2001) (Rejects good-faith objection to 36-month 20% plan that compromises $55,000 debt that would be nondischargeable in a Chapter 7 case. “[T]he mere fact that a Chapter 13 debtor attempts to discharge a debt that would be nondischargeable under a Chapter 7 is not sufficient in itself to warrant a finding that a plan was not proposed in good faith; however, this fact can be relevant to a determination of good faith.”); In re Ault, 271 B.R. 617, 621 (Bankr. E.D. Ark. 2002) (Rejects former mother-in-law’s good-faith objection in Chapter 13 case filed after discharge was denied in Chapter 7 case. “[T]hat the Debtor’s discharge was denied previously or that a claim was determined to be nondischargeable or probably would be nondischargeable is not, standing alone, bad faith sufficient to sustain an objection to confirmation.”); In re Gillespie, 266 B.R. 721 (Bankr. N.D. Iowa 2001) (Rejects good-faith objection to 60-month plan that would pay $2,660.42 toward a $90,000 claim for assault during a fight at a bar.); In re Johnson, 262 B.R. 831 (Bankr. D. Idaho 2001) (A claim arising from the sale of a business that would probably be nondischargeable is one factor that weighs against the debtor in good-faith analysis; other factors outweigh the nondischargeability of the objecting creditor’s prepetition judgment.); In re Manthey, 262 B.R. 89, 90 (Bankr. N.D. Cal. 2001) (“The court may, but need not, find bad faith where a debt to be discharged in Chapter 13 would be nondischargeable in a Chapter 7 case. The court has considered and declines to find bad faith based on this ground, as [the creditor] has made no prima facie showing that his claim would be nondischargeable in Chapter 7.”); In re Wilcox, 251 B.R. 59 (Bankr. E.D. Ark. 2000) (Confirms 60-month plan that would pay 18% of claim for prepetition breach of trust.); In re Allen, 241 B.R. 710 (Bankr. D. Mont. 1999) (Rejects ex-spouse’s good faith objection to confirmation of 0% plan that would compromise $3,025,000 claim for assault and battery allegedly committed by the debtor while the parties were married.); In re Martin, 233 B.R. 436, 447 (Bankr. D. Ariz. 1999) (24% payment of claim for conversion of real estate commissions is “not an altogether bad result” because claim was trebled.); In re Nipper, 224 B.R. 756 (Bankr. E.D. Mo. 1998) (Overrules bad-faith objection to plan that would compromise embezzlement judgment with 10% payment through plan. Embezzlement judgment was declared nondischargeable in a prior Chapter 7 case.); In re Britt, 211 B.R. 74, 79 (Bankr. M.D. Fla. 1997) (Rejects good-faith objection to plan that compromises $61,014.81 claim for embezzlement that was declared nondischargeable in a prior Chapter 7 case. Embezzlement claim is the only listed claim. “Ms. Britt’s prior act of embezzlement is clearly against public policy, but Congress distinguishes Chapter 13 from Chapter 7. The dischargeability of a debt in Chapter 7 is a limited factor to be considered in a Chapter 13.”); In re Presley, 201 B.R. 570 (Bankr. N.D. Fla. 1996) (Court finds good faith notwithstanding that plan will discharge attorney’s fees and court costs that may be nondischargeable in a Chapter 7 case.); In re Alicea, 199 B.R. 862, 865 (Bankr. D.N.J. 1996) (No lack of good faith in a 0% plan that includes no payment of surcharges by Department of Motor Vehicles. That the DMV surcharges may be nondischargeable in a Chapter 7 but dischargeable in a Chapter 13 case “is not evidence of bad faith, since Congress itself elected to make the chapter 13 discharge broader than the chapter 7 discharge.”); In re Allard, 196 B.R. 402, 415 (Bankr. N.D. Ill.) (Applying “totality of circumstances” test and nine factors from Ravenot v. Rimgale (In re Rimgale), 669 F.2d 426 (7th Cir. 1982), and In re Smith, 848 F.2d 813 (7th Cir. 1988), 24%, 60-month plan that compromises $140,000 claim that is potentially nondischargeable in a Chapter 7 case is filed in good faith. “[T]he Court has considered this factor—that the debt may be nondischargeable in a Chapter 7 case—in determining whether the instant plan was filed in good faith. This factor, however, standing alone, is not outcome determinative. . . . [T]he Debtor’s pre-filing conduct . . . does not prevent the Court from finding that the plan was proposed in good faith.”), aff’d, 202 B.R. 938 (N.D. Ill. 1996); In re Corino, 191 B.R. 283 (Bankr. N.D.N.Y. 1995) (Rejects good-faith challenge to fourth Chapter 13 case that proposes a 10% dividend over five years with respect to criminal and civil judgments for embezzlement.); In re Anadell, 190 B.R. 309, 312 (Bankr. S.D. Ohio 1995) (Rejects good-faith challenge to 60-month plan that pays 9% of a $72,000 judgment for misappropriation of client funds by a former attorney. “The primary debt sought to be discharged most likely would not be dischargeable if this case were still under chapter 7. The difficulty of using the [Metro Employees Credit Union v. Okoreeh-Baah (In re Okoreeh-Baah), 836 F.2d 1030 (6th Cir. 1988),] criteria can be seen in this case. Proper motivation, sincerity, and nonabuse of the chapter 13 remedy must mean something other than a satisfactory analysis of all factors except the type of debt sought to be discharged. . . . He appears . . . to be putting his life back together in as responsible a manner as possible. He has served his time in prison and has lost his professional license. Perhaps he is the sort of individual for whom chapter 13 relief is intended.”); In re Martin, 189 B.R. 619 (Bankr. E.D. Va. 1995) (Rejects good-faith objection to 6%, 36-month plan that would discharge 94% of a $100,000 judgment for assault and battery that would be nondischargeable in a Chapter 7 case. Denies confirmation on classification and disposable-income-test grounds, but defects appear to be repairable.); In re Hope, 184 B.R. 590 (Bankr. N.D. Ala. 1995) (Plan is filed in good faith notwithstanding that car lender is unsecured because debtors promised to sign papers that would permit the creditor to note its lien on the car, but failed to do so.); Lilley v. United States (In re Lilley), 181 B.R. 809, 812 (Bankr. E.D. Pa.) (“This court therefore finds it inconsistent with Congressional intent to suggest that the fact that a debt is nondischargeable in a Chapter 7 case is in itself a ground for denying confirmation of a Chapter 13 plan.” Court confirms a plan managing $178,000 of nonpriority, personal income taxes.), rev’d in part, aff’d in part, 185 B.R. 489 (E.D. Pa. 1995) (Court affirms finding that plan was proposed in good faith but then dismisses case for cause under § 1307(c).), rev’d and remanded, 91 F.3d 491, 494–95 (3d Cir. 1996) (District court erred in reversing bankruptcy court with respect to dismissal of Chapter 13 case for cause; however, bankruptcy court erred in holding that good faith is not a filing requirement in a Chapter 13 case. “[T]ax fraud is not ‘cause’ for dismissal of a Chapter 13 petition . . . . Section 1328(a) and 523(a)(1)(C), read together, demonstrate Congress’s intent that tax-related debts of the sort at issue here be dischargeable under Chapter 13.”); In re Harlan, 179 B.R. 133 (Bankr. W.D. Ark. 1995) (Court confirms plan paying 14% of judgment for embezzlement that was declared nondischargeable in a Chapter 7 case.); In re Short, 176 B.R. 886, 889–90 (Bankr. S.D. Ind. 1995) (Court rejects good-faith challenge to 48-month plan that pays 20% of claim for embezzlement. “[T]he state court declined to enter a restitution order to impose a criminal fine in the embezzlement proceeding brought against Mrs. Short. Accordingly, the state court’s decision allows for the discharge of this debt in a Chapter 13 bankruptcy. . . . [T]he contention that this case was filed with the sole purpose of discharging an otherwise nondischargeable debt is undermined by the fact that the case was filed jointly by Mr. and Mrs. Short, rather than by Mrs. Short alone.”); In re Coburn, 175 B.R. 400, 404 (Bankr. D. Or. 1994) (“The debt to this creditor would not be dischargeable in chapter 7 if the creditor filed a timely and appropriate complaint objecting to the discharge of this debt. . . . [T]his court finds this factor of little help. . . . [I]t cannot be an indication of bad faith for a debtor to take advantage of a law passed for his benefit.”); In re Dunning, 157 B.R. 51, 53 (Bankr. W.D.N.Y. 1993) (“[T]he Court flatly rejects the argument that the possibility that [a credit card] debt might be non-dischargeable in a Chapter 7 case precludes the Debtors from proposing a Chapter 13 plan” in good faith. However, court denies confirmation where there is evidence that the debtor has not committed all net disposable income to payments under the plan as required by § 1325(b).); In re Little, 116 B.R. 615 (Bankr. S.D. Ohio 1990) (25% plan including debts for insufficient-funds checks); In re Selden, 116 B.R. 232 (Bankr. D. Or.), aff’d, 121 B.R. 59 (D. Or. 1990) (4% plan is confirmed when all unsecured debt is student loans.); In re Farley, 114 B.R. 711 (Bankr. S.D. Cal. 1990) (confirming 15% plan that compromises large judgment for driving under the influence of alcohol); In re Belt, 106 B.R. 553 (Bankr. N.D. Ind. 1989) (Compromise of claim arising from driving while intoxicated is not bad faith.); In re Castello, 98 B.R. 523 (Bankr. D. Or. 1989), vacated, 123 B.R. 466 (B.A.P. 9th Cir.), aff’d on remand, 127 B.R. 257 (Bankr. D. Or. 1991) (0% payment of unsecured claims including student loans and claim for assault); In re Winthurst, 97 B.R. 457 (Bankr. C.D. Ill. 1989) (1% plan discharging substantial student loans); In re Teel, 97 B.R. 552 (Bankr. W.D. Mo. 1989) (false financial statement); In re Keffer, 87 B.R. 509 (Bankr. S.D. Ohio 1988) (unlawful pawning of collateral); In re Sutliff, 79 B.R. 151 (Bankr. N.D.N.Y. 1987) (80% of debt is student loans.); In re Riggleman, 76 B.R. 111 (Bankr. S.D. Ohio 1987) (judgment for willful and malicious injury); In re Cruz, 75 B.R. 56 (Bankr. D.P.R. 1987) (§ 523(a)(2)(A)); In re Easley, 72 B.R. 948 (Bankr. M.D. Tenn. 1987) (aggravated assault); In re Gathright, 67 B.R. 384 (Bankr. E.D. Pa. 1986), aff’d, 71 B.R. 343 (E.D. Pa. 1987) (large student loan obligations); In re Manes, 67 B.R. 13 (Bankr. E.D. Ark. 1986) (6% plan compromising prepetition claim for damages from an assault); In re Williams, 66 B.R. 646 (Bankr. C.D. Ill. 1986) (One-half of unsecured debt is educational loans.); In re Kazzaz, 62 B.R. 308 (Bankr. E.D. Va. 1986) (larceny claim); In re Whitehead, 61 B.R. 397 (Bankr. D. Or. 1986) (conversion); In re Rushton, 58 B.R. 36 (Bankr. M.D. Ala. 1986) (student loans); In re Schyma, 68 B.R. 52 (Bankr. D. Minn. 1985) (9% plan compromising large bank claim alleged to be nondischargeable under § 523(a)(2)(B)); In re Krull, 54 B.R. 375 (Bankr. D. Colo. 1985) (“wrongful conduct”); In re Peterson, 53 B.R. 339 (Bankr. D. Or. 1985) (student loan); In re McBroom, 51 B.R. 953 (Bankr. W.D. Va. 1985) (fraud); In re Otero, 48 B.R. 704 (Bankr. E.D. Va. 1985) (filing false reports for housing allowances from the Navy); In re Edwards, 51 B.R. 792 (Bankr. D.N.M. 1984) (embezzlement); In re Dos Passos, 45 B.R. 240 (Bankr. D. Mass. 1984) (student loans); In re McAloon, 44 B.R. 831 (Bankr. E.D. Va. 1984) (student loans); In re Vensel, 39 B.R. 866 (Bankr. E.D. Va. 1984) (student loans); In re Eppers, 38 B.R. 301 (Bankr. D.N.M. 1984) (misrepresentation, conversion); In re Ramus, 37 B.R. 723 (Bankr. N.D. Ga. 1984) (tort liability); In re Ali, 33 B.R. 890 (Bankr. D. Kan. 1983) (student loan); In re Jones, 31 B.R. 485 (Bankr. N.D. Ill. 1983) (public assistance overpayments); In re McMonagle, 30 B.R. 899 (Bankr. D.S.D. 1983) (judgment declared nondischargeable in a Chapter 7 case, then converted to Chapter 13); In re Martini, 28 B.R. 932 (Bankr. S.D.N.Y. 1983) (student loans).

 

8  Gier v. Farmers State Bank (In re Gier), 986 F.2d 1326 (10th Cir. 1993) (claim for conversion of cattle); Noreen v. Slattengren, 974 F.2d 75 (8th Cir. 1992) (claim for damages for debtor’s sexual abuse of a minor); In re Schaitz, 913 F.2d 452 (7th Cir. 1990) (claim declared nondischargeable in a prior Chapter 7 case); Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990) (en banc) (Judgment for intentional shooting); Hardin v. Caldwell (In re Caldwell), 895 F.2d 1123 (6th Cir. 1990) (judgment for false arrest, malicious prosecution, and false imprisonment is declared nondischargeable in Chapter 7 case.); Pioneer Bank of Longmont v. Rasmussen (In re Rasmussen), 888 F.2d 703 (10th Cir. 1989) (fraud claim that survived discharge in a prior Chapter 7 case); Davis v. Mather (In re Davis), 239 B.R. 573 (B.A.P. 10th Cir. 1999) (Lack of good faith in .4% plan that would compromise $170,000 claim declared nondischargeable in still pending Chapter 7 case.); In re McGovern, 282 B.R. 506 (Bankr. S.D. Fla. 2002) (Not bad faith that 51-month plan will compromise a claim for willful and malicious injury that would be nondischargeable in a Chapter 7 case.), rev’d, 297 B.R. 650 (S.D. Fla. 2003) (Bankruptcy court failed to adequately consider debtor’s prepetition misconduct.); First United Sav. Bank v. Edwards, 184 B.R. 46 (S.D. Ind. 1995) (debt for conversion that was declared nondischargeable in prior Chapter 7 case); Schaffner v. Internal Revenue Serv., 95 B.R. 62 (E.D. Mich. 1988) (illegal tax protest); In re Sanabria, 52 B.R. 75 (N.D. Ill. 1985) (student loans); In re Chase, 43 B.R. 739 (D. Md. 1984) (criminal conduct); In re Beauty, 42 B.R. 655 (E.D. La. 1984) (nondischargeable debts surviving prior discharge); In re Duke, 29 B.R. 802 (D. Kan. 1983) (debts denied discharge in prior Chapter 7 case); In re Sellers, 285 B.R. 769 (Bankr. S.D. Ga. 2001) (Bad faith that sole purpose of Chapter 13 case is to compromise large conversion claim declared nondischargeable in a prior Chapter 7 case.); In re Fretwell, 281 B.R. 745, 752 (Bankr. M.D. Fla. 2002) (Plan to compromise $100,000 of credit card debt incurred in two years before the petition was not filed in good faith. “Debtors filed Chapter 13 not in a sincere effort to repay their creditors but rather to avoid dischargeability issues . . . . [T]he Court finds it likely that some, if not all of the credit card debt, would be excepted from Debtors’ discharge.”); In re Holder, 263 B.R. 622 (Bankr. N.D. Ala. 2001) (That debt obtained by fraud and declared nondischargeable in prior Chapter 7 case comprises 82% of unsecured, nonpriority claims indicates a lack of good faith in debtor’s 60-month, 30% plan.); In re Altmann, 256 B.R. 468 (Bankr. S.D. Miss. 2000) (Bad faith that 100% of the scheduled debt relates to a $249,821.39 judgment based on reprehensible, outrageous and abusive misconduct in a fiduciary relationship between the debtor and his grandmother.); In re White, 255 B.R. 737 (Bankr. W.D. Mo. 2000) (0% plan that would discharge a $300,000 claim for malicious prosecution that was declared nondischargeable in the debtor’s prior Chapter 7 case is not proposed in good faith. That the debtor made no payments on the judgment between 1993 and 2000 but instead filed a Chapter 7 case in an unsuccessful effort to discharge the judgment and then initiated state court litigation that was resolved against the debtor all are indicative of an effort to manipulate the Bankruptcy Code.); In re Haskell, 252 B.R. 236, 244 (Bankr. M.D. Fla. 2000) (Lack of good faith was evidenced in part by unscheduled claims of creditors asserting that the debtor engaged in false and deceptive sales practices. “A Chapter 13 plan serving no purpose other than the discharge of an otherwise nondischargeable debt not in need of Chapter 13 relief should be denied for lack of good faith. . . . [T]he Court received credible evidence that a large portion of Debtor’s unsecured debt may be nondischargeable in a Chapter 7 case.”); In re Larson, 245 B.R. 609 (Bankr. D. Minn. 2000) (That the debtor incurred a substantial unsecured business debt when his business was “clearly failing” and when the debtor “had no apparent intent or ability to repay” is substantial evidence of bad faith.); In re Mattson, 241 B.R. 629, 638 (Bankr. D. Minn. 1999) (Although “reprehensible conduct that amounted to racial discrimination” is insufficient by itself to support a finding of bad faith, many other factors indicated bad faith, including transfers of assets to avoid collection, the filing of serial bankruptcy cases and a proposed plan that would delay successful state court plaintiffs in their collection efforts.); In re Baird, 234 B.R. 546, 552 (Bankr. M.D. Fla. 1999) (Lack of good faith in 36-month, 72% plan that would compromise a claim for fraud, conversion and civil theft that would be nondischargeable in a Chapter 7 case. “A Chapter 13 plan serving no purpose other than the discharge of an otherwise nondischargeable debt by a debtor not in need of Chapter 13 relief should be denied for lack of good faith.”); In re Petersen, 228 B.R. 19, 26 (Bankr. M.D. Fla. 1998) (Discharge of $550,000 nondischargeable judgment by plan paying 2% over 36 months is not good faith. “A Chapter 13 Plan serving no purpose other than the discharge of an otherwise nondischargeable debt by a debtor not in need of Chapter 13 relief should be denied for lack of good faith. . . . The judgment against the Debtor is for fraud, conversion, extortion, false imprisonment, malicious prosecution, intentional infliction of emotional distress and conspiracy.”); In re Turpen, 218 B.R. 908 (Bankr. N.D. Iowa 1998) (Plan to pay unsecured claims pro rata from liquidation of nonexempt property fails good-faith test when large claim of United States for filing a false claim would be nondischargeable in a Chapter 7 case.); In re Georgeff, 218 B.R. 403 (Bankr. S.D. Ohio 1998) (Bad faith when debtor proposes 30% plan that compromises claim for professional malpractice and conversion that would not be discharged in Chapter 7 case.); In re Davis, 218 B.R. 177 (Bankr. E.D. Okla. 1998) (Bad faith when Chapter 13 case was filed while Chapter 7 case was still pending, purpose of Chapter 13 was to deal with nondischargeable judgments and Chapter 7 trustee had filed an adversary proceeding to revoke discharge in the Chapter 7 case.); In re McLaughlin, 217 B.R. 772 (Bankr. W.D. Tex. 1998) (Payment of $2,455 toward $177,031.02 judgment for breach of fiduciary duty is bad faith.); In re Kelly, 217 B.R. 273 (Bankr. D. Neb. 1997) (Full-time graduate student working part-time in a liquor store fails good-faith test when 8.5% plan will compromise $30,000 claim for misappropriation of funds from a bank that would be nondischargeable in a Chapter 7 case.); In re Zaleski, 216 B.R. 425 (Bankr. D.N.D. 1997) (Lack of good faith when debtors with gross monthly income of $7,145 propose an 11.5%, three-year plan that compromises claims that might be nondischargeable under § 523(a)(2).); In re Games, 213 B.R. 773, 778–80 (Bankr. E.D. Wash. 1997) (Bad faith that debtor’s plan would pay 100% of nondischargeable criminal traffic fines in 49 months but 0% to other unsecured claim holders. “[T]he Debtors seek the extraordinary benefit of the Chapter 13 super discharge—discharge of civil traffic infractions, reinstatement of driving privileges and repayment of nondischargeable and priority debt over an extended period of time—with no extraordinary sacrifice, all to the detriment of the general unsecureds. . . . The court finds the Debtors’ refusal to provide any benefit to the general unsecured creditors evidences a lack of good faith.”); In re McCall, 199 B.R. 173 (Bankr. E.D. Ark. 1996) (Bad faith that debtor converted from Chapter 7 to Chapter 13 one month after bankruptcy court determined a large credit card debt to be nondischargeable.); In re Pickering, 195 B.R. 759 (Bankr. D. Mont. 1996) (Bad faith where debtor proposes 2% payment of major debt declared nondischargeable in a prior Chapter 7 case.); In re Oliver, 186 B.R. 403 (Bankr. E.D. Va. 1995) (80% of unsecured claims were declared nondischargeable in prior Chapter 7 case.); In re Tobiason, 185 B.R. 59 (Bankr. D. Neb. 1995) (alleged breach of federal and state securities laws); In re Norwood, 178 B.R. 683 (Bankr. E.D. Pa. 1995) ($60,000 claim for sexual assault); In re Paulson, 170 B.R. 496, 498 (Bankr. D. Conn. 1994) (Court denies confirmation of tax protester’s plan filed solely to stop IRS collection activity. “[W]here the debt to be discharged under Chapter 13 could not be discharged under Chapter 7, a court should closely scrutinize the debtor’s motivation and any other relevant factors in considering whether good faith exists.”); In re Sutherland, 161 B.R. 657 (Bankr. E.D. Ark. 1993) (restitution claim); In re Carsrud, 161 B.R. 246 (Bankr. D.S.D. 1993) (civil judgment for sexual assault); In re Kuriakuz, 155 B.R. 454 (Bankr. E.D. Mich. 1993) (Principal debt was a fraud judgment that would be nondischargeable in a Chapter 7 case.); In re Sitarz, 150 B.R. 710 (Bankr. D. Minn. 1993) (embezzlement of money from a business); In re Jahnke, 146 B.R. 830 (Bankr. E.D. Cal. 1992) (credit card claim declared nondischargeable under § 523(a)(2)(A)); In re Ristic, 142 B.R. 856 (Bankr. E.D. Wis. 1992) (claims resulting from burglary and setting fire to a business); In re Rogers, 140 B.R. 254 (Bankr. W.D. Mo. 1992) (claim stipulated to be nondischargeable in a prior Chapter 7 case); In re Whipple, 138 B.R. 137 (Bankr. S.D. Ga. 1991) (tort claim that would be nondischargeable under § 523(a)(6)); In re Edwards, 132 B.R. 400 (Bankr. E.D. Ark. 1991) (criminal restitution); In re Dillon-Bader, 131 B.R. 463 (Bankr. D. Kan. 1991) (student loans); In re Smith, 130 B.R. 102 (Bankr. D. Utah 1991) (student loans); In re Santa Maria, 128 B.R. 32 (Bankr. N.D.N.Y. 1991) (child support); In re Dotson, 124 B.R. 836 (Bankr. N.D. Okla. 1991) (student loans); In re Sieg, 120 B.R. 533 (Bankr. D.N.D. 1990) (student loans); In re Bush, 120 B.R. 403 (Bankr. E.D. Tex. 1990) (embezzlement); In re Castonguay, 119 B.R. 256 (Bankr. D. Kan. 1990) (student loans); In re Parker, 118 B.R. 539 (Bankr. S.D. Ohio 1990) (judgment for malicious prosecution); In re Thomas, 118 B.R. 421 (Bankr. D.S.C. 1990) (complaint by two women that the debtor secretly videotaped them in sexual acts and played the tapes at his bachelor party); In re Carpico, 117 B.R. 335 (Bankr. S.D. Ohio 1990) (student loans); In re Carver, 110 B.R. 305 (Bankr. S.D. Ohio 1990) (embezzlement); In re Jacobs, 102 B.R. 239 (Bankr. E.D. Okla. 1989) (claims declared nondischargeable in prior Chapter 7 case); In re Rose, 101 B.R. 934 (Bankr. S.D. Ohio 1989) (prepetition criminal misconduct); In re Swan, 98 B.R. 502 (Bankr. D. Neb. 1989) (assault and battery); In re McKinney, 93 B.R. 135 (Bankr. S.D. Ohio 1988), aff’d, 118 B.R. 968 (S.D. Ohio 1990) (student loans); In re Huber, 80 B.R. 531 (Bankr. D. Colo. 1987) (nondischargeable debt for foster care support fee); In re Makarchuk, 76 B.R. 919 (Bankr. N.D.N.Y. 1987) (student loans); In re Kourtakis, 75 B.R. 183 (Bankr. E.D. Mich. 1987) (assault); In re Davidson, 72 B.R. 384 (Bankr. D. Colo. 1987) (past-due child support or alimony); In re Hazel, 68 B.R. 287 (Bankr. E.D. Mich. 1986), aff’d, 95 B.R. 481 (E.D. Mich. 1988) (debt arising from illegal tax protest); In re Hale, 65 B.R. 893 (Bankr. S.D. Ga. 1986) (student loans); In re Todd, 65 B.R. 249 (Bankr. N.D. Ill. 1986) (civil rights judgment); In re Doersam, 60 B.R. 130 (Bankr. S.D. Ohio 1986) (student loans); In re Geehan, 59 B.R. 600 (Bankr. S.D. Ohio 1986) (student loans); In re Brown, 56 B.R. 293 (Bankr. N.D. Ill. 1985) (fraud); In re Wall, 52 B.R. 613 (Bankr. M.D. Fla. 1985) (fraud); In re Myers, 52 B.R. 248 (Bankr. M.D. Fla. 1985) (fraud); In re Vance, 49 B.R. 973 (Bankr. D. Minn. 1985) (student loans); In re Brock, 47 B.R. 167 (Bankr. S.D. Cal. 1985) (embezzlement); In re Nkanang, 44 B.R. 955 (Bankr. N.D. Ga. 1984) (student loans); In re Williams, 42 B.R. 474 (Bankr. E.D. Ark. 1984) (student loans); In re Dalby, 38 B.R. 107 (Bankr. D. Utah 1984) (student loans); In re Johnson, 36 B.R. 67 (Bankr. S.D. Ill. 1984) (student loans); In re Boyd, 57 B.R. 410 (Bankr. N.D. Ill. 1983) (fraud); In re Keiser, 35 B.R. 496 (Bankr. D. Del. 1983) (claims that would be nondischargeable in a Chapter 7 case); In re Hawkins, 33 B.R. 908 (Bankr. S.D.N.Y. 1983) (student loans); In re Canda, 33 B.R. 75 (Bankr. D. Or. 1983) (student loans); Lincoln v. Cherry Creek Homeowners Ass’n, 30 B.R. 905 (Bankr. D. Colo. 1983) (unsecured claim that appears to be nondischargeable in a liquidation case); In re Sanders, 28 B.R. 917 (Bankr. D. Kan. 1983) (debts denied discharge in a prior Chapter 7 case); Margraf v. Oliver (In re Oliver), 28 B.R. 420 (Bankr. S.D. Ohio 1983) (fraud); In re Sotter, 28 B.R. 201 (Bankr. S.D.N.Y. 1983) (criminal conduct).

 

9  See, e.g., In re Gillespie, 266 B.R. 721, 727 (Bankr. N.D. Iowa 2001) (Rejects good-faith objection to 60-month plan that would pay $2,660.42 toward a $90,000 claim for assault during a fight at a bar. “Gillespie acted intentionally. He caused life-threatening injuries. Assuming that this court must consider the ‘public policy factors . . . implicated in discharging this debt,’ [Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346, 1351 (8th Cir. 1990)], there are not enough facts known about the incident with Bass to say whether an important public policy is implicated. Moreover, some facts tend to show the incident was less egregious than the LeMaire situation, which involved a premeditated attempted murder with a firearm. Gillespie’s conviction was for an aggravated misdemeanor. He received probation, in contrast to LeMaire’s 27-month prison term. Gillespie said that he did not start the fight and was trying to break it up. . . . The court concludes that . . . Gillespie is making a sincere effort to repay his debts, within his limited means.”); In re Wilcox, 251 B.R. 59, 67 (Bankr. E.D. Ark. 2000) (Confirms 60-month plan that would pay 18% of claim for prepetition breach of trust. “Roy Wilcox’s conduct, if tested under a chapter 7 dischargeability action, probably rises to the level of willful and malicious injury. . . . UP has made a prima facie case for nondischargeability under this provision. . . . Nevertheless, the Court notes that fraud, embezzlement, conversion, and similar offenses dealing with property, while resulting in nondischargeable debts in a chapter 7 case, are not as ‘morally repugnant’ as attempted murder and sexual assault, the type of prepetition conduct supporting rulings of bad faith in binding Eighth Circuit Court of Appeals precedents. . . . Here, the creditor is a financial institution, not an individual who might have suffered extreme hardship from a similar loss. Furthermore, the indebtedness to UP arose from a commercial relationship between the parties and did not result from the betrayal of a close personal relationship.”); In re Nipper, 224 B.R. 756, 759 (Bankr. E.D. Mo. 1998) (Distinguishing Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990), and Noreen v. Slattengren, 974 F.2d 75 (8th Cir. 1992), overrules bad-faith objection to plan that would compromise embezzlement judgment with 10% payment through plan. Debtor’s wife embezzled $43,237.32 from her employer. She pleaded guilty to theft, was sentenced to five years in prison and was placed on probation conditioned that she pay $250 per month to the victim. A civil judgment was entered against the debtor and the debtor’s wife for $29,450.07 based on a finding that the debtor “knew or should have known” of his wife’s embezzlement. The debtors filed Chapter 7 case in which the embezzlement debt was declared nondischargeable. A subsequent Chapter 13 case was dismissed. Second Chapter 13 case proposed a 10% dividend. “The Court finds this case to be distinguishable from Noreen and In re LeMaire in that the wrongful conduct giving rise to Thomas Nipper’s debt to Automation Service, embezzlement, is not as morally repugnant as either attempted murder or sexual assault of a minor.”); In re Burris, 208 B.R. 171, 175–76 (Bankr. W.D. Mo. 1997) (Plan is proposed in good faith that compromises prepetition judgments for selling and concealing assets of deceased husband’s estate. The death of the debtor’s husband “set off a scramble for assets.” The deceased husband’s personal representative sued the debtor and won judgments for $12,000 for the sale of a boat and for $92,000 for concealing or disposing of a gun collection. The debtor filed Chapter 13 and proposed to pay between 15% and 20% of the judgments. Personal representative objected to confirmation. “In [Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990),] . . . it was the heinous nature of debtor’s crime, combined with the nondischargeability under Chapter 7, that swayed the Court. . . . [N]o one contends her conduct approaches the criminal conduct condemned by the Circuit Court in LeMaire. . . . Ms. Burris does not deny that she had a relationship with Mr. Knoll, and that she loaned him some money. The relationship began soon after Charles Senior’s death, ended quickly thereafter, and Mr. Knoll has never repaid the loan. While her hastiness in establishing a relationship with Mr. Knoll may have been unwise, and loaning him money may have been foolish, neither act indicates willful and malicious conduct, especially in light of the egregious conduct the Court found willful and malicious in LeMaire.”); In re Presley, 201 B.R. 570 (Bankr. N.D. Fla. 1996) (Court rejects good-faith objection to confirmation notwithstanding that plan will discharge attorney’s fees and court costs that may be nondischargeable in a Chapter 7 case. Debtor’s unsuccessful effort to recover “minimal damages” in a lawsuit against the city in state court is not the sort of “criminal, fraudulent or malevolent conduct” that would justify a finding of bad faith under cases like Noreen v. Slattengren, 974 F.2d 75 (8th Cir. 1992).); In re Martin, 189 B.R. 619, 622 (Bankr. E.D. Va. 1995) (Rejects good-faith objection to 6%, 36-month plan that would discharge 94% of a $100,000 judgment for assault and battery that would be nondischargeable in a Chapter 7 case. “Martin’s pre-petition behavior, while reprehensible, does not rise to the level of that described in [In re Sitarz, 150 B.R. 710 (Bankr. D. Minn. 1993)] and [Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990)].”); In re Tobiason, 185 B.R. 59, 64 (Bankr. D. Neb. 1995) (“[A]ttempting to discharge a debt that would be nondischargeable in a Chapter 7 bankruptcy . . . is a factor that may be weighed. . . . However, except in egregious situations such as assault and attempted murder, I conclude that a court should not place decisive weight on this factor.”); In re Harlan, 179 B.R. 133, 140 (Bankr. W.D. Ark. 1995) (Court confirms plan paying 14% of judgment for embezzlement that was declared nondischargeable in a Chapter 7 case. Distinguishing Noreen v. Slattengren, 974 F.2d 75 (8th Cir. 1992), and Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990), “Harlan’s conduct in embezzling funds from Dr. Jeffery is simply not as egregious as the debtor’s conduct of attempted murder in In re LeMaire.”). See also Ed Schory & Sons, Inc. v. Francis (In re Francis), 273 B.R. 87, 94 (B.A.P. 6th Cir. 2002) (Affirms confirmation of plan paying 2% or 3% of $229,000 claim declared nondischargeable in prior Chapter 7 case. “Cases where the courts have refused to confirm a chapter 13 plan that included a pre-petition debt that was or would be nondischargeable in a chapter 7 proceeding are distinguishable from the case at bar and generally include more egregious conduct by the debtors after the debt was incurred.”), aff’d, No. 02-3288, 2003 WL 21782600 (6th Cir. July 31, 2003) (unpublished).

 

10  See In re Gillespie, 266 B.R. 721, 727 (Bankr. N.D. Iowa 2001) (“[T]he incident was less egregious than the [Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990)] situation, which involved a premeditated attempted murder with a firearm. Gillespie’s conviction was for an aggravated misdemeanor [assault].”).