Cite as: Keith M. Lundin, Lundin On Chapter 13, § 106.2, at ¶ ____, LundinOnChapter13.com (last visited __________).
When the debtor’s prepetition misconduct was sufficiently egregious to result in criminal prosecution, intense good-faith scrutiny is almost certain. Somewhat more often than with respect to ordinary nondischargeable claims,1 Chapter 13 plans that compromise claims resulting from prepetition criminal misconduct fail good-faith review.2 There is legislative history to the Bankruptcy Reform Act of 1994 to support the argument that at least Congressman Brooks would treat “heinous crimes” differently than other prepetition misconduct in Chapter 13 cases.3
Some of the reported opinions teeter on the edge of a per se rule against confirmation of a Chapter 13 plan that pays less than 100 percent of a claim arising from prepetition criminal conduct.4 In contrast, a few courts have reasoned that when the debtor “pays his debt to society” by being prosecuted, convicted and imprisoned, the debtor is subject to good-faith scrutiny but entitled to confirmation if other good-faith factors are satisfied.5 That a state court declined to impose (nondischargeable) restitution or a criminal fine in the prepetition embezzlement proceeding against the debtor was cited by one court in support of good faith in a plan that proposed to pay 20 percent of the debt for embezzlement.6 Some would say ironically, another court found that a debtor’s prepetition embezzlement conviction disabled her from earning enough to repay the victim and thus supported good faith in a plan paying 14 percent of the judgment for embezzlement.7 That misconduct may subject the debtor to criminal consequences (but hasn’t yet) has been treated by some courts as less compelling evidence of bad faith.8 Several courts have concluded that not all prepetition criminal misconduct has the same impact on good-faith analysis at confirmation of a Chapter 13 plan.9
That the victim of a debtor’s prepetition criminal misconduct often can snarl confirmation doesn’t mean the victim is better off killing the Chapter 13 case. The victim will be economically better off, with partial payment through a confirmed plan when the alternative is chasing a disappearing debtor through the state courts.10
In anticipation of a good-faith objection to confirmation, the debtor guilty of prepetition criminal misconduct should consider a five-year plan that maximizes payment to the victim. The debtor might separately classify the victim’s claim for as much payment as possible in a five-year plan.11 If the court finds the favorable classification is unfair discrimination under § 1322(b)(1), then the debtor is best positioned to argue that a plan treating all unsecured creditors equally is proposed in good faith for purposes of § 1325(a)(3).
1 See § 183.1 [ In General ] § 106.1 In General.
2 See, e.g., Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990) (en banc) (Court reverses as clearly erroneous confirmation of a 60-month plan paying 42% of a judgment for intentional shooting when the debtor served 27 months in prison, returned to graduate school after prison, and received his Ph.D. Bankruptcy court failed to accord sufficient weight to the nondischargeability of the principal debt. Court of appeals disagrees with the bankruptcy court’s conclusion that the debtor was sincere.); Schaffner v. IRS, 95 B.R. 62 (E.D. Mich. 1988) (Court affirms denial of confirmation on bad-faith grounds when tax protestor seeks to use Chapter 13 to discharge tax debts after conviction for filing false returns.); In re Chase, 43 B.R. 739 (D. Md. 1984) ($25,000 consent judgment in a criminal prosecution for sexual assault of a minor child); In re Scotten, 281 B.R. 147, 149 (Bankr. D. Mass. 2002) (Denies confirmation of 10% plan that would compromise a judgment for assault and battery after the debtor was convicted of statutory rape and served five years in prison. “[T]he Debtor is attempting to use the Chapter 13’s ‘superdischarge’ to discharge a debt that would be nondischargeable under Chapter 7. . . . [T]here are virtually no other creditors . . . . [T]he Creditor will obtain an extremely small dividend in comparison to her injuries. . . . [I]t appears that the Debtor’s sole motivation for filing is to avoid paying the Creditor.”); In re Sutherland, 161 B.R. 657 (Bankr. E.D. Ark. 1993) (Apparently on bad-faith grounds, court denies confirmation of 9% plan that would pay restitution claim pro rata with other unsecured claim holders.); In re Sitarz, 150 B.R. 710, 722–23, 725 (Bankr. D. Minn. 1993) (Interpreting the Eighth Circuit’s opinions in Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990), and Noreen v. Slattengren, 974 F.2d 75 (8th Cir. 1992), “[c]ommon to both decisions is the notion that ‘public policy’ should prohibit a Chapter 13 debtor convicted of a serious criminal offense on the basis of pre-bankruptcy conduct from significantly impairing the right of his victim to a civil recovery. . . . Once the LeMaire rationale is pared to this essence, there is no reason why it also should not be applied to at least some cases involving the intentional infliction of serious financial injuries that had criminal consequences. This ‘public policy’ dimension suggests several other factors for the good-faith analysis in cases where the debtor’s pre-petition conduct towards the complaining creditor resulted in the debtor’s criminal conviction and in a debt nondischargeable under Chapter 7. The legal and/or personal relationship between the debtor and the objecting creditor should be considered. If the relationship was a fiduciary one in a legal sense, or involved a substantial degree of personal trust in a factual sense, the causative role of a breach of that trust in the injury to the creditor bears on whether the debtor is in good faith in invoking Chapter 13. The identity of the creditor, whether institutional or individual, is certainly relevant. The personal impact of the debtor’s conduct on an individual creditor, both at the time of the infliction of the injury and in its future, is also significant. . . . The extent to which the debtor’s payment proposal would make the objecting creditor financially whole . . . is another factor for consideration.” Court denies confirmation on bad-faith grounds of a 7%, five-year plan where the debtor embezzled money from a business he managed and otherwise brought financial ruin on the business owners. The debtor’s former employers will “have to live with the financial consequences of his wrongdoing for the rest of their lives. . . . [T]he Debtor has shown no compelling reason why he should not have to also, as a matter of both moral and legal responsibility. Where . . . the sole debt to be adjusted directly resulted from the betrayal of a close personal relationship, the breach of strong personal trust, and felonious conduct in that breach, the proposal to obtain a discharge under Chapter 13 amounts to an unfair manipulation of the Bankruptcy Code.”); In re Ristic, 142 B.R. 856 (Bankr. E.D. Wis. 1992) ($15-per-month payment toward claim in excess of $124,000 resulting from debtor’s burglary of and setting fire to a business is not good faith. Debtor is serving a seven-year sentence for arson and has almost no income. Debtor’s motivation is to satisfy the obligations arising from his criminal misconduct while he is incarcerated. The only dischargeable debt in Chapter 13 case would be nondischargeable in a Chapter 7 case. Creditor injured by debtor’s prepetition misconduct will receive only a fraction of 1% spread out over five years without interest. Chapter 13 trustee testified that the proposed plan would create an undue administrative burden because the cost of maintaining the case will exceed the fee payable from the nominal payments by the debtor.); In re Edwards, 132 B.R. 400, 403 (Bankr. E.D. Ark. 1991) (It is bad faith to pay less than 3.2% of a $25,000 claim for criminal restitution. Proposed 60-month plan would pay $100 per month toward a $10,000 criminal fine but less than 3.2% of the restitution claim arising from the same misconduct. Debtor understated income, overstated expenses, “did not present a demeanor consistent with truthfulness,” and conceded that discharge of the victim’s restitution claim was the primary reason for filing the case.); In re Bush, 120 B.R. 403 (Bankr. E.D. Tex. 1990) (Court denied confirmation of 36-month, $100-per-month plan when debtor pleaded guilty to embezzlement and consented to determination of nondischargeability prior to conversion from Chapter 7 to Chapter 13. That debtor seeks to discharge a claim arising from criminal misconduct that would be nondischargeable in a Chapter 7 case is not outcome determinative but is “a legitimate area of inquiry and concern” in the good-faith calculus.); In re Carver, 110 B.R. 305 (Bankr. S.D. Ohio 1990) (Court denies confirmation of plan that would pay 10% of a claim that resulted from debtor’s prepetition embezzlement.); In re Rose, 101 B.R. 934 (Bankr. S.D. Ohio 1989) (After Metro Employees Credit Union v. Okoreeh-Baah (In re Okoreeh-Baah), 836 F.2d 1030 (6th Cir. 1988), a debtor’s prepetition criminal misconduct is but one element in the totality of circumstances. Debtor’s proposal to pay less than 100% of restitution judgment resulting from prepetition dishonesty is violation of good-faith requirement.); In re Zelnar, 91 B.R. 448 (Bankr. N.D. Ohio 1988) (Court denies confirmation of 3%, three-year plan proposing to compromise claims for embezzlement when debtor embezzled a second time to make restitution for first embezzlement and then served 19 months in prison for the second embezzlement.); In re Kourtakis, 75 B.R. 183 (Bankr. E.D. Mich. 1987) (criminal assault); In re Easley, 72 B.R. 948 (Bankr. M.D. Tenn. 1987) (Judgment for damages after criminal prosecution for aggravated assault.); In re Hazel, 68 B.R. 287, 290 (Bankr. E.D. Mich. 1986), aff’d, 95 B.R. 481 (E.D. Mich. 1988) (It is bad faith for self-styled “tax protester” to seek confirmation of a 1% plan that would discharge tax claims “arising from the debtor’s unlawful refusal to pay those taxes.” “[T]o file a petition in bankruptcy in order to discharge a debt arising from illegal activity is clearly bad faith.”); In re Kazzaz, 62 B.R. 308 (Bankr. E.D. Va. 1986) (judgment following conviction for attempted grand larceny of insurance monies); In re Edwards, 51 B.R. 792 (Bankr. D.N.M. 1984) (embezzlement); In re Sotter, 28 B.R. 201 (Bankr. S.D.N.Y. 1983) (“[T]he major obligations sought to be wiped out under [this] Chapter 13 plan is [sic] rooted in criminal conduct.”).
3 See 140 Cong. Rec. H10,765 (section-by-section analysis by Congressman Brooks) (“[I]t is not contemplated that an individual who committed [a] heinous crime would be able in good faith to use Chapter 13 solely as a means of discharging a civil obligation owing to a harmed party.”). See also § 180.1 [ Prepetition Conduct and Misconduct—In General ] § 105.1 Prepetition Conduct and Misconduct—In General.
4 See, e.g., In re Chase, 43 B.R. 739 (D. Md. 1984) (District court reverses confirmation of plan proposing to compromise $25,000 consent judgment in a criminal prosecution for sexual assault of a minor child by payment of $9,750 through the plan. Bankruptcy court held extensive hearing and determined that it was the debtor’s best effort and that the debtor had absolutely no alternative for payment of the judgment.); In re Sitarz, 150 B.R. 710, 722–25 (Bankr. D. Minn. 1993) (Interpreting the Eighth Circuit’s opinions in Handeen v. LeMaire (In re LeMaire), 898 F.2d 1346 (8th Cir. 1990), and Noreen v. Slattengren, 974 F.2d 75 (8th Cir. 1992), “[c]ommon to both decisions is the notion that ‘public policy’ should prohibit a Chapter 13 debtor convicted of a serious criminal offense on the basis of pre-bankruptcy conduct from significantly impairing the right of his victim to a civil recovery. . . . Where . . . the sole debt to be adjusted directly resulted from the betrayal of a close personal relationship, the breach of strong personal trust, and felonious conduct in that breach, the proposal to obtain a discharge under Chapter 13 amounts to an unfair manipulation of the Bankruptcy Code.”); In re Hazel, 68 B.R. 287, 290 (Bankr. E.D. Mich. 1986), aff’d, 95 B.R. 481 (E.D. Mich. 1988) (“[T]o file a petition in bankruptcy in order to discharge a debt arising from illegal activity is clearly bad faith.”).
5 See, e.g., In re Gonzales, 297 B.R. 143 (Bankr. D.N.M. 2003) (Confirms 60-month plan that would pay 5% of nondischargeable claim for aggravated battery after debtor served two years in prison.); In re Gillespie, 266 B.R. 721, 727 (Bankr. N.D. Iowa 2001) (Bankruptcy court confirms 60-month plan that pays $2,660.42 toward a $90,000 claim arising from a fight at a bar for which the debtor was found guilty of assault with intent to inflict serious injury. “Gillespie is making a sincere effort to repay his debts, within his limited means.”); In re Nipper, 224 B.R. 756, 758, 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 . . . . Nipper did not file his case in an anticipation of an adverse verdict in a civil case. . . . Nipper proposed paying his entire disposable income to his creditors. . . . Nipper has not been alleged to have failed to schedule a significant liability. Additionally, Nipper has not included any debts on his schedules . . . that cause the Court to question the accuracy of his schedules.”); In re Corino, 191 B.R. 283, 290–91 (Bankr. N.D.N.Y. 1995) (Court rejects good-faith challenge to fourth Chapter 13 case filed to deal with criminal and civil judgments for embezzlement. Debtor was convicted and sentenced to two years’ imprisonment for embezzling $101,917.33 from a bank in 1985. Debtor filed four Chapter 13 cases between 1987 and 1995. Fourth plan proposed 10% dividend over five years. “Debtor’s four bankruptcy filings over an eight year period and her invocation of Chapter 13 in order to discharge an arguably non-dischargeable obligation certainly raises the specter of bad faith. . . . Debtor proposes to make payments over five years. . . . Debtor’s case is not a two party dispute. . . . Debtor has not manipulated the Code by filing a so-called Chapter 20. . . . [T]he present case concerns a widowed mother who is seeking financial redemption for an acknowledged misdeed committed more than ten years ago. As a consequence of embezzling funds from [the bank], Debtor has already served time in prison, has forfeited a savings account and since 1989 has paid [the bank] approximately $6,500 pursuant to various wage garnishment orders. . . . Debtor offered credible testimony that she has attempted to negotiate a repayment plan with [the bank]. . . . [D]espite Debtor’s egregious pre-filing conduct, . . . Debtor has demonstrated a good faith effort to satisfy her creditors’ claims. Debtor not only appeared repentant, but her efforts in negotiation and her proposal to pledge all of her disposable income to a five year plan demonstrates [sic] a willingness to pay her debt to [the bank].”); In re Anadell, 190 B.R. 309, 311–12 (Bankr. S.D. Ohio 1995) (Court rejects good-faith challenge to 60-month plan that pays 9% of a $72,302.57 judgment for misappropriation of client funds by a former attorney. Debtor was a practicing attorney with a substance abuse problem. Debtor lost his law license, spent a number of years in prison, and now works as a legal assistant in the office of the Ohio public defender. “[D]ebtor is now proposing to pay as much as he probably can pay . . . has proposed a plan of maximum duration and appears to be accurate in his statements. He has not preferred certain creditors, is not modifying any secured claims, has not presented any special financial circumstances, and has not had any other bankruptcy cases within the last six years. . . . [H]e is not proposing a plan which would present any administrative burden for the trustee. . . . 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 Castello, 98 B.R. 523 (Bankr. D. Or. 1989), vacated, 123 B.R. 466 (B.A.P. 9th Cir.), on remand, 127 B.R. 257 (Bankr. D. Or. 1991) (Court confirms plan paying 100% of restitution obligation and nothing to general unsecured claims, including claims for student loans and an unliquidated claim for assault that would probably be nondischargeable in a Chapter 7 case.); In re Easley, 72 B.R. 948 (Bankr. M.D. Tenn. 1987) (Fundamental fairness is satisfied when the debtor has been punished for prepetition criminal misconduct in a nonbankruptcy forum.); In re Edwards, 51 B.R. 792 (Bankr. D.N.M. 1984) (Dividend of $1,000 on claim for embezzlement in excess of $80,000 is proposed in good faith when debtor was sentenced to three years in prison after criminal conviction and is now judgment-proof.).
6 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 Debtors . . . proposed a Plan which voluntarily extended plan payments an additional year beyond the three-year requirement, thereby resulting in a larger dividend to unsecured creditors. Chapter 13 Debtors are not required to pay more than three years’ disposable income into a plan in order to obtain a discharge under this chapter. . . . The fact that Debtors chose to do so in this case is indicative of good faith. . . . [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.” That the debtors will not commit to pay $17,000 contained in an exempt pension plan did not violate good faith because unlike the debtor in In re Solomon, 166 B.R. 832 (Bankr. D. Md. 1994), this debtor could not withdraw money from the pension plan without suffering statutory penalties, and this debtor had not otherwise manipulated her finances to avoid payment of the debt for embezzlement.).
7 In re Harlan, 179 B.R. 133, 138–40 (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), “[t]he evidence reflects that Harlan filed her Chapter 13 petition on August 3, 1994, approximately twenty-one (21) months after her Chapter 7 petition had been filed. . . . The Court credits Harlan’s testimony that because of her felony embezzlement conviction she cannot find a higher paying job. . . . Harlan has accurately stated her debts and expenses. . . . Harlan has not made any fraudulent misrepresentations to mislead the Bankruptcy Court. . . . The Court likewise cannot conclude that the filing of Harlan’s Chapter 7 petition was abuse under 11 U.S.C. § 707(b). . . . Harlan has not unfairly manipulated the Bankruptcy Code. . . . The Court credits Harlan’s testimony that the IRS’s levies [on her exempt real property] were the primary motivating factor in her seeking relief under Chapter 13 of the Code. Harlan did not file a Chapter 13 petition seeking to avoid Jeffery’s nondischargeable claim immediately after receiving her discharge under Chapter 7. . . . Harlan’s modified plan is a sixty (60) month plan, the maximum permitted by statute. . . . Harlan’s living expenses consist of bare necessities. . . . [T]here is no evidence that Harlan filed her Chapter 13 bankruptcy case because Jeffery was attempting to collect his judgment. There is no evidence of Harlan not listing all of her debts. There is likewise no evidence of Harlan making preferential payments prior to filing her Chapter 13 bankruptcy case. Further, 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.”).
8 See, e.g., In re Mandarino, 277 B.R. 464, 470 (Bankr. E.D.N.Y. 2002) (That the debtor faces criminal liability for buying pirated descrambling devices does not establish bad faith. “Congress enacted a super-discharge provision that says to chapter 13 debtors: ‘Please feel free to file for relief under chapter 13 even though in a chapter 7 case, you might have to defend against a nondischargeability complaint under § 523(a)(6).’ . . . [I]t makes no sense as a matter of pragmatic statutory construction for a bankruptcy court to sustain an objection to confirmation or to grant a motion to dismiss because the debtor took advantage of a fundamental provision that Congress intentionally enacted.”), corrected and superseded by No. 801-87252-288, 2002 WL 1050388 (Bankr. E.D.N.Y. May 20, 2002).
9 See In re Lancaster, 280 B.R. 468, 476, 477, 483 (Bankr. W.D. Mo. 2002) (That the debtor burned down his estranged wife’s boyfriend’s house was “repugnant and reprehensible, as well as criminal . . . . [It is] clearly relevant to the Court’s decision as to whether the Debtor has acted in good faith.” That the debtor was charged with burglary, not attempted murder, that he confessed, pleaded guilty and completed probation indicated that the debtor’s actions were not “so egregious, standing alone, as to foreclose him completely from seeking protection and relief under Chapter 13.” 36-month plan paying less than 3% was not filed in good faith because “he has not proposed to pay the victim of his criminal conduct and the parties injured by his conduct, a substantial enough amount through the Plan, and he has not devoted a sufficient amount of his income to the payment of his creditors.”); 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 Nipper, 224 B.R. 756, 758, 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 and 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 based on a finding that the debtor “knew or should have known” of his wife’s embezzlement. “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 Martin, 189 B.R. 619, 622 (Bankr. E.D. Va. 1995) (Court 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 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.”).
10 See, e.g., In re Gonzales, 297 B.R. 143, 152 (Bankr. D.N.M. 2003) (Confirms 60-month plan that would pay 5% of nondischargeable claim for aggravated battery after debtor served two years in prison. “Congress enacted the ‘super-discharge’ provisions of chapter 13 in part based on its finding that most creditors who obtain a nondischargeable judgment in connection with a chapter 7 case ultimately collected little or nothing from that judgment . . . . Given Debtor’s age (62) and his varying sources of income, and the fact that social security income is immune from garnishment . . . the likelihood of Mr. Dutchover collecting anything is rapidly diminishing. . . . [T]hese circumstances are exactly those contemplated by the statute, and call for confirming the plan.”); In re Georgeff, 218 B.R. 403, 408 (Bankr. S.D. Ohio 1998) (Court denies confirmation for lack of good faith when debtor proposed 30% plan that compromised nondischargeable claim for professional malpractice and conversion. Court then chided the victim’s efforts to block confirmation: “Confirmation of this 30% plan and the powers the creditor has to force later amendment of a plan if the debtor’s income greatly improves probably represent a much better collection result than will be achieved outside of bankruptcy. The debtor also is required to report his income and business operations to the trustee on a periodic basis. Should the amount of Bauer’s judgment either be increased or decreased as a result of the pending appeal, the claims amendment process and the plan modification process allow for necessary adjustments. Certainly Bauer is free to choose her course of action, but exercising one’s ‘rights’ does not always equate to improving one’s position. The chapter 13 remedy, as administered by the trustee in this district, treats creditors fairly with minimum costs to the creditor. Negotiation of an acceptable initial dividend, rather than dismissal or conversion, could bring a better result.”).
11 See §§ 187.1 [ Separate Classification of Nondischargeable Claims and Good Faith ] § 106.5 Separate Classification of Nondischargeable Claims and Good Faith and 154.1 [ Restitution, Fines and Other Criminal Problems ] § 88.7 Restitution, Fines and Other Criminal Problems.