Berliner v. Pappalardo (In re Buck), 509 B.R. 737, 741 (D. Mass. Apr. 2, 2014) (Saylor) (Proper standard is set forth in Berliner v. Pappalardo (In re Puffer), 674 F.3d 78 (1st Cir. Mar. 22, 2012) (Selya, Souter, Lipez): "[F]ee-only plans are not bad faith per se. Instead, such plans may be justified in 'special circumstances,' and whether the debtor and her attorney acted in good faith must be evaluated based on a 'totality of the circumstances.'"), 432 B.R. 13, 22 n.14 (Bankr. D. Mass. July 9, 2010) (Boroff) (Plans lacked good faith when 94% of payments would go to attorney fees and debtors were eligible for Chapter 7. "[O]verwhelming majority of courts that have addressed this question agree that Attorney Fee-Only Chapter 13 Plans fail to meet the good faith requirement of § 1325(a)(3).").
Berliner v. Pappalardo (In re Puffer), 494 B.R. 1, 5-8 (D. Mass. May 6, 2013) (Stearns) (On remand, no special circumstances justified fee-only Chapter 13 plan, but bankruptcy court inappropriately punished debtor's attorney for trying by denying fees. "This court agrees with the Bankruptcy Court that Puffer has failed to shoulder the exceptional burden identified by the Court of Appeals. . . . Puffer has not demonstrated a compelling need for the immediate filing of a bankruptcy petition, such as the imminence of wage garnishment, repossession of an essential means of transportation, foreclosure of a home, or loss of access to basic care. . . . Berliner's experiment with a fee-first plan was not indefensible. . . . [S]ome courts have approved fee-only plans under what the First Circuit might deem 'special circumstances,' others have required no such showing. . . . Nor was Puffer's filing marred by the 'plus' factors that have led courts to find a fee-only plan to have been filed in bad faith. . . . [T]he bankruptcy bar would be well advised to file future fee-only plans in only the most extraordinary and compelling of cases. Berliner's conduct, however, should not be viewed through the prism of hindsight nor should he be sanctioned for doing something that fell comfortably within the range of what many bankruptcy lawyers (and judges) at the time would have thought reasonable. . . . Berliner should have his fee."), aff'g in part, rev'g in part 480 B.R. 451 (Bankr. D. Mass. Oct. 25, 2012) (Boroff), on remand from No. 10-CV-30225-MAP, 2012 WL 1455091 (D. Mass. Apr. 25, 2012) (unpublished) (Ponsor), on remand from 674 F.3d 78 (1st Cir. Mar. 22, 2012) (Selya, Souter, Lipez) ("Fee-only" Chapter 13 plan is not per se bad faith. "We believe that the totality of the circumstances approach to adjudicating good faith should apply equally to inquiries under section 1325. . . . The totality of the circumstances test cannot be reduced to a mechanical checklist . . . . But we, like other courts, are reluctant to read per se limitations into section 1325's good faith calculus. . . . [W]e reject the bankruptcy court's holding that fee-only Chapter 13 plans are per se in bad faith. . . . [F]ee-only arrangements may be vulnerable to abuse by attorneys. . . . Notwithstanding these shortcomings, endorsing a blanket rule that fee-only Chapter 13 plans are per se submitted in bad faith would be to throw out the baby with the bathwater. While fee-only plans should not be used as a matter of course, there may be special circumstances, albeit relatively rare, in which this type of odd arrangement is justified. Given this possibility, prudence dictates that we hew to the overarching principle that the presence or absence of good faith should be ascertained case by case. . . . This opinion should by no means be read as a paean to fee-only Chapter 13 plans. The dangers of such plans are manifest, and a debtor who submits such a plan carries a heavy burden of demonstrating special circumstances that justify its submission."), rev'g and remanding 453 B.R. 14, 19, 21-22 (D. Mass. July 8, 2011) (Ponsor) (Attorney-fee-only plans lack good faith. Plan would pay $100 monthly for 36 months, with only $300 to creditors other than attorney. Bankruptcy court denied allowance of all attorney fees and expenses, other than filing fee, finding "sole reason Debtor chose Chapter 13 over Chapter 7 was the three months needed to save funds to pay [attorney's] Chapter 7 fee in advance." "Debtors who need the services of bankruptcy attorneys will often, almost ex hypothesis, lack funds to pay them. Bankruptcy counsel, including Appellant here, deserve praise for choosing to work in this difficult arena and for taking on the uncertain cases of frequently desperate people. The existence of risk and difficulty with the Chapter 7 process after BAPCPA does not, however, justify distorting the law to cobble together an ersatz solution under Chapter 13. In any event, the bankruptcy judge certainly did not commit any error of law, or abuse his discretion, in refusing to award any fee for doing this. The problem with fee-only chapter 13 plans was well expressed by the bankruptcy judge in [In re Buck, 432 B.R. 13 (Bankr. D. Mass. July 9, 2010) (Boroff)]. If fee-only plans were permitted, the trustee's sole purpose would be to assure that the attorney were [sic] paid. As the court wrote, '[t]o require [the trustee] to administer cases simply to make monthly payments to the Debtors' attorney and no other creditor defies both logic and the intent of Congress.' In re Buck, 432 B.R. at 21.").
Brown v. Gore, No. 1:12-CV-02202-RDP, 2012 WL 6609005 (N.D. Ala. Dec. 13, 2012) (Proctor), aff'd, 742 F.3d 1309 (11th Cir. Feb. 14, 2014) (Carnes, Hull, Cox) (Filing lacked good faith when only purpose was to fund attorney fees.), aff'g, No. 11-42528-JJR-13, 2012 WL 909782 (Bankr. N.D. Ala. Mar. 16, 2012) (Robinson) (Plans paying debtors' counsel in installments, and little else, were not filed in good faith notwithstanding some payment to unsecured creditors. Court cites "majority view" that attorney fee-only plans fail good-faith requirement.).
Ingram v. Burchard, 482 B.R. 313 (N.D. Cal. Sept. 28, 2012) (Rogers) (Lien-stripping, attorney-fee-only plans may be appropriate under rare circumstances, but totality of circumstances supported denial of confirmation for lack of good faith.), aff'g No. 11-13216, 2012 WL 10812 (Bankr. N.D. Cal. Jan. 3, 2012) (Jaroslovsky) (Plan lacked good faith that paid only attorney and trustee fees; debtors could easily pay something to creditors by extending length of plan beyond 36 months.).
Sikes v. Crager, No. 10-1863, 2011 WL 4591889, at *5 (W.D. La. Sept. 30, 2011) (Hicks) (Plan not in good faith when first 35 months would pay only administrative expenses, primarily attorney fees, and in 36th month unsecured creditors would get $76. "A more conscionable plan (i.e. good faith plan) would be to truly pay the creditors for most of the 36 months instead of paying just attorney and administrative fees. The creditors here are the losing parties virtually to the exclusion of payments of the attorney who is the only one profiting."), rev'd, 691 F.3d 671 (5th Cir. Aug. 16, 2012) (Higginbotham, Haynes, Higginson).).
In re Jones, No. 17-40497, 2018 WL 4501140, at *1–*2 (Bankr. S.D. Ill. Apr. 26, 2018) (Altenberger) (Not bad faith that plan will pay $3,000 attorney fee and only $550—7.4%—to general unsecured creditors. “Based on the facts of this case, there are two options available to the Debtor. The first is to reduce the amount of the attorney fees and have the attorney in effect subsidize the Plan. The second is to have the low income Debtor forego filing for bankruptcy protection. Neither is a desirable option. . . . [A]ttorney fees . . . should not be intertwined with § 1325(b)(1)’s requirement that debtors pay either 100% of general unsecured claims or all of their disposable income. . . . Intertwining the two can result in a plan being denied confirmation even though the attorney fees are justified under § 328 and a debtor is paying creditors all that he/she can afford.”).
In re Banks, 545 B.R. 241, 244-46 (Bankr. N.D. Ill. Feb. 9, 2016) (Schmetterer) (Fee-only Chapter 13 plan was proposed in good faith when debtor has special circumstance that Chapter 13 case can discharge parking ticket fines that would be nondischargeable in a Chapter 7 case. "[F]ee-only Chapter 13 plans are not per se bad faith. . . . [F]ee-only plans must meet a '"heavy burden" in demonstrating "special circumstances" [ ] to justify the chapter 13 petition or the chapter 13 plan.' . . . Chapter 13 offers this Debtor something that Chapter 7 cannot offer him and that he desperately needs—a discharge of his debt owed to the City of Chicago for parking tickets so that he can keep his driver's license. In this case, 'special circumstances' do exist to warrant the Debtor filing a Chapter 13 instead of a Chapter 7.").
In re Wark, 542 B.R. 522, 527-50 (Bankr. D. Kan. Dec. 17, 2015) (Karlin) (U.S. Trustee's good-faith challenge to fee-only Chapter 13 cases is rejected when debtors lack financial ability to pay dividend to unsecured creditors and debtors can't wait months to save up fees for Chapter 7 cases. "The United States Trustee . . . urges this Court to set a high threshold for debtors to choose a Chapter 13 when they are otherwise eligible for a Chapter 7, arguing that debtors should not have this choice. . . . [D]ebtors cannot choose . . . Chapter 13 . . . unless they can show 'special circumstances' justifying the filing of a Chapter 13 petition and plan, and being unable to raise the cash to hire competent counsel is not such a special circumstance in the U.S. Trustee's estimation. . . . [T]his Court instead looks to the totality of the circumstances surrounding each debtor's filing to determine whether these Debtors have filed their Chapter 13 bankruptcy plan in good faith, as required by 11 U.S.C. § 1325(a)(3). . . . Ultimately, for the majority of the cases, the Court finds no fault in the choices Debtors have made, and declines to take the U.S. Trustee's suggestion to supplant Debtors' choices with his own. . . . [T]he U.S. Trustee admits both that Debtors have 'done nothing wrong' and that each Debtor needs bankruptcy relief. . . . Because of the Supreme Court's decision in Lamie v. United States Trustee, [540 U.S. 526, 124 S. Ct. 1023, 157 L. Ed. 2d 1024 (Jan. 26, 2004),] . . . attorneys filing Chapter 7 petitions for debtors must collect their fee up front lest the attorney risk that fee being rendered dischargeable as a prepetition debt. . . . The Circuits to consider challenges to fee only plans unanimously agree that fee only Chapter 13 cases are not per se filed in bad faith . . . . [T]he Standing Chapter 13 Trustee . . . cannot say that a fee only case causes any more (or less) administrative work than other Chapter 13 cases. . . . [I]n addition to the significantly higher administrative burdens pro se cases create . . . , they are rarely successful. . . . The U.S. Trustee's position in this case would doom [a debtor] to living her foreseeable future in poverty, and perhaps even in unnecessary ill health. Because she could not afford to pay a lawyer to file a Chapter 7, and because she does not have the education or wherewithal to file her own case, the U.S. Trustee's position is that she must instead simply forgo receiving any bankruptcy relief until she can afford the requisite attorney fee. . . . The U.S. Trustee's position, if adopted, would mire similar debtors in a cycle of poverty. And for what purpose?").
In re Barnes, No. 12-06613-8-RDD, 2013 WL 153848, at *8-*9 (Bankr. E.D.N.C. Jan. 15, 2013) (Doub) (Attorney fee only plan with early termination provision is not proposed in good faith. Citing Hamilton v. Lanning, 560 U.S. 505, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010), "the 'forward-looking' approach is totally contradictory to the concept of a plan which includes an early termination provision. . . . [I]t is known or virtually certain that the debtor will continue to have the income to continue making payments for the duration of the thirty-six (36) or sixty (60) month period and will have the income available after attorney's fees are paid. . . . While 'good faith' does not necessarily require a substantial repayment to creditors, the proposed Plan, with the Trustee's early termination language, provides payment of only attorney fees. Such proposal does not strike this Court as a good faith attempt to repay pre-petition creditors.").
In re Mathis, No. 12-05618-8-RDD, 2013 WL 153833, at *8-*12 (Bankr. E.D.N.C. Jan. 15, 2013) (Doub) (Attorney fee only plan with early termination provision fails good-faith test. "Based on the Supreme Court decisions in [Hamilton v. Lanning, 560 U.S. 505, 130 S. Ct. 2464, 177 L. Ed. 2d 23 (June 7, 2010), Ransom v. FIA Card Services, N.A., __ U.S. __, 131 S. Ct. 716, 178 L. Ed. 2d 603 (Jan. 11, 2011),] . . . this Court is compelled to adopt a forward-looking approach to determine projected disposable income and holds that the Applicable Commitment Period is a temporal requirement for all debtors. . . . [T]he 'forward-looking' approach is totally contradictory to the concept of a plan which includes an early termination provision. . . . [I]t is known or virtually certain that attorney's fees will be paid prior to the expiration of the applicable commitment period, which frees up additional projected disposable income to be received during the applicable commitment period for the benefit of unsecured creditors. . . . While 'good faith' does not necessarily require a substantial repayment to creditors, the proposed plan, with the Trustee's early termination language, provides payment of only attorney fees. Such proposal does not strike this Court as a good faith attempt to repay pre-petition creditors. . . . '[A]ttorney fee only' Chapter 13 petitions and plans are not per se filed in bad faith as the debtor, upon an objection by the Trustee or unsecured creditor, may be able to prove circumstances which would justify an attorney fee only case. Here, with the early termination provision, there are no priority or secured creditors other than the Trustee's fees and the Debtor's attorneys' fees. The plan is in essence only a payment plan for the attorneys' fees and this is unacceptable. Chapter 13 was not created as a vehicle for the payment of attorneys' fees only. . . . The Debtor is not adjusting anything. . . . [T]he early termination language in this case violates the good faith requirements of 11 U.S.C. § 1325(a)(3), (7).").
In re Tedder, No. 12-06232-8-RDD, 2013 WL 145416 (Bankr. E.D.N.C. Jan. 14, 2013) (Doub) (Attorney fee only plan with early termination provision is not proposed in good faith when all secured debt will be paid directly by the debtor and plan will terminate in less than applicable commitment period without payment to unsecured creditors.).
In re Platt, No. 12-6170-RLM-13, 2012 WL 5842899 (Bankr. S.D. Ind. Nov. 19, 2012) (Moberly) (Although not per se bad faith, attorney-fee-only plan was not supported by proof of special circumstances.).
In re Kirk, 465 B.R. 300 (Bankr. N.D. Ala. Jan. 23, 2012) (Robinson) (Plan that delayed payments to secured auto creditor for eight months while paying attorney fees was not in good faith. Additional factor was secured auto debt incurred shortly before filing of case.).
In re Drocco, No. 09-71696 TG, 2010 WL 703113, at *4 (Bankr. N.D. Cal. Feb. 25, 2010) (Tchaikovsky) ("Court is unlikely to confirm" a plan that pays only trustee's fee and minimal debtor's attorney fees, with nothing to general creditors.).
In re Villca, No. 09-16569-SSM, 2009 WL 3754737, at *3 (Bankr. E.D. Va. Nov. 5, 2009) (unpublished) (Mitchell) ("[A] plan does not lack good faith simply because the debtors are paying their attorney more than they are paying their creditors. On the other hand, the disproportion does raise the question of why . . . these above-median income debtors have chosen to make payments only over three years. . . . [A]lthough the court does not find that either the ratio of the attorneys fees to the plan payment or the use of chapter 13 to obtain relief not available in chapter 7, standing alone, constitutes bad faith, they are appropriate factors to be considered in applying the totality of the circumstances test. Coupled as they are here, with a minimal, even meaningless dividend on unsecured claims, and a plan period that is less than the statutory commitment period, the court cannot find that the plan is proposed in good faith unless the debtors agree to extend the plan period to five years.").
In re Nelson, No. 09-3-852-DHW, 2009 WL 2241567, at *2 (Bankr. M.D. Ala. July 24, 2009) (Williams) (Plan that pays $2,500 in attorney fees, one secured debt and less than $1,000 to unsecured creditors is not filed in good faith. "[T]he plan is not filed in good faith because it is chiefly a means of financing the debtor's attorney's fee.").
In re Molina, 420 B.R. 825 (Bankr. D.N.M. June 29, 2009) (Starzynski) (Disagreeing with In re Paley, 390 B.R. 53 (Bankr. N.D.N.Y. June 3, 2008) (Littlefield), and In re Sanchez, No. 13-09-10955 MA, 2009 WL 2913224 (Bankr. D.N.M. May 19, 2009) (McFeeley), divorced grandmother with net monthly income of $1,393 who cares for six-year-old grandson and has no nonexempt assets clears good-faith hurdle notwithstanding that plan pays attorney's fees but nothing to unsecured creditors and debtor received Chapter 7 discharge more than four but less than eight years before this petition. Applying Flygare v. Boulden (In re Flygare), 709 F.2d 1344 (10th Cir. June 1, 1983) (Holloway, McKay, Seymour), debtor needed bankruptcy relief for herself and dependent.).
In re Sanchez, No. 13-09-10955 MA, 2009 WL 2913224 (Bankr. D.N.M. May 19, 2009) (McFeeley) (Plan that pays attorneys' fees and nothing to unsecured creditors lacks good faith.).
In re Montry, 393 B.R. 695 (Bankr. W.D. Mo. Sept. 11, 2008) (Venters) (Plan that makes no payment on prepetition debt and only pays attorney fees is not proposed in good faith. Plan would evade § 727(a)(8) restriction on successive Chapter 7 discharges and is contrary to prohibition in Laime v. United States Trustee, 540 U.S. 526, 124 S. Ct. 1023, 157 L. Ed. 2d 1024 (2004), against paying postpetition attorney fees from Chapter 7estate.).