§ 152.4     Cause for Dismissal, Including Bad-Faith, Multiple and Abusive Filings
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 152.4, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

If the debtor is ineligible for Chapter 13 relief, dismissal is one appropriate remedy.1 Dismissal is the remedy when a Chapter 13 case has been filed in violation of an order prohibiting the filing or in violation of the prohibition against refiling in § 109(g).2 It has been held that dismissal is the appropriate remedy when the debtor’s signature on the petition was signed by an agent without revealing that it was not the debtor’s original signature.3 Failure to satisfy the 15-day time limit for filing the plan and other required papers in Bankruptcy Rules 3015 and 1007(c) constitutes cause for dismissal.4 The intentional failure to a schedule a known creditor or to list the creditor’s proper address may be cause for dismissal under § 1307(c).5 A Chapter 13 business debtor’s failure to file operating reports can be a ground for dismissal.6 Failure of the debtor to comply with local rules and “duties orders” that require such things as the filing of tax returns is cause for dismissal.7 Ignoring court orders to file or amend the schedules, statement, plan or other documents is a ground for dismissal.8 Even without an explicit finding of bad faith,9 giving false testimony, filing misleading or inaccurate schedules or statement and omitting assets or creditors are facts often cited in decisions that dismiss Chapter 13 cases for cause.10 Failure to appear at the § 341 meeting of creditors can be cause for dismissal.11 A Chapter 13 petition deliberately filed in the wrong venue to stop a foreclosure sale was dismissed with prejudice to refiling for 180 days to prevent the debtor from benefiting from the intentionally incorrect venue.12

[2]

The failure of the debtor to timely commence making payments under § 1326(a) is cause for dismissal under § 1307(c)(4).13 That the proposed plan does not comply with § 1322 or 1325, that the debtor has failed to confirm a plan and that the debtor seems unable to propose a confirmable plan are causes for dismissal under §1307(c)(5).14 Unreasonable delay by the debtor is cause for dismissal under § 1307(c)(1).15

[3]

The debtor’s failure to make payments required by the confirmed plan can be cause for dismissal.16 That the debtors are in default of payments and the plan exceeds the five-year limitation in § 1322(c) is cause for dismissal.17 Default in payments under a confirmed plan coupled with the denial of the debtor’s request for a hardship discharge is cause for dismissal under § 1307(c)(6) because the motion for hardship discharge necessarily conceded that modification to cure the defaults was not practicable.18 Even when the debtor is not in default under the confirmed plan, a plan that exceeds five years that cannot be modified to complete payments within five years has been dismissed for cause.19

[4]

Facts indicating that the debtor is delaying collection efforts, but is not engaged in an honest effort to repay creditors, incline courts to dismissal.20 Tax protester cases often fit in this category.21

[5]

Although bad faith is not listed as a cause for dismissal in § 1307(c), it is the most often cited basis for dismissal. Every court of appeals that has considered the question has concluded that “lack of good faith” or something like it is an included cause for dismissal of a Chapter 13 case. Decisions in which bad faith is cited as cause for dismissal of a Chapter 13 case are collected by circuit and district in Appendix O.

[6]

It is generally held that the test for bad-faith dismissal of a Chapter 13 case under § 1307(c) is similar to the analysis of good faith required for confirmation under § 1325(a)(3); however, proof sufficient to deny confirmation of a plan for lack of good faith will not always also be sufficient to dismiss the case for cause.22 Even when applying the same good-faith test at confirmation and at dismissal, some courts make the point that the burden of proof is not the same—at confirmation the debtor has the burden of proof with respect to good faith under § 1325(a)(3);23 the creditor or trustee moving for dismissal bears the burden of proof under § 1307(c).24 The characteristics of a bad-faith Chapter 13 case include the presence of few creditors, filing on the eve of a foreclosure sale or on the eve of some other litigation event in another court, the debtor’s failure to meet deadlines for filing or amending the statement, schedules or the plan, the debtor’s failure to attend the meeting of creditors or other hearings, a plan that proposes little payment to creditors, a plan that has no hope of confirmation and general lying, cheating or stealing by the debtor.25

[7]

The most compelling evidence of bad faith in support of dismissal of a Chapter 13 case is often a history of serial, multiple or abusive filings by the debtor. Dozens of reported decisions dismissing Chapter 13 cases cite a pattern of repeat filings or find that the debtor is abusing Chapter 13 in some way.26 The occasional bad actor trying a fourth or fifth time to use the automatic stay to stop a foreclosure sale or some other creditor action is preemptively dismissed for cause under § 1307(c). Some of these bad faith filing decisions reveal bankruptcy courts frustrated by serial filings and the dismissals often include other sanctions such as a limitation on refiling or an award of attorneys’ fees.27

[8]

The Supreme Court’s decision in Johnson v. Home State Bank28 impacts the view that serial bankruptcy filings by the same debtor are cause for dismissal under § 1307(c). In Johnson, the Supreme Court addressed the question whether a mortgage lien that survived discharge in a Chapter 7 case was a “claim” in a subsequent Chapter 13 case. The Supreme Court concluded that the surviving lien was a claim that could be managed through the Chapter 13 plan.29 In reaching this conclusion, the Supreme Court observed that the serial filing of a Chapter 13 case soon after discharge in a Chapter 7 case is not precluded by the Code. The Court noted that congress expressly prohibited some patterns of serial filing, but not all, in § 109(g).30

[9]

Johnson is some authority that a successive or repeat filing is not cause for dismissal so long as it is not prohibited by § 109(g). In Society National Bank v. Barrett (In re Barrett),31 the U.S. Court of Appeals for the Sixth Circuit cites Johnson for the proposition that “serial filings are not, in and of themselves, improper, unless they fall within one of the enumerated categories of prohibited serial filings.”32 In Barrett, the Sixth Circuit affirmed the bankruptcy court’s refusal to dismiss a debtor’s third Chapter 13 case filed to prevent a foreclosure when the “totality of the circumstances” indicated that the third case was filed in good faith. There are reported decisions from several bankruptcy courts acknowledging that Johnson at least reduces the weight to be afforded serial filings in the analysis of cause for dismissal.33

[10]

In an opinion with troubling implications for Chapter 13 practice, the U.S. Court of Appeals for the Seventh Circuit found cause for dismissal based on the failure of a confirmed plan to satisfy one of the mandatory requirements in § 1322(a). In In re Escobedo,34 the plan proposed to pay $25 per month for 36 months. Notice was given to all creditors, including the IRS, and no one objected to confirmation. After confirmation, administrative and tax claims totaling $24,158 were allowed; however, the debtor never modified the plan to pay these huge priority claims. Instead, the debtor continued to make $25-per-month payments.

[11]

Nearly five years after confirmation, the trustee moved to dismiss. The Seventh Circuit held that dismissal was appropriate for this reason:

Any plan lacking the requirements of § 1322(a)(2) . . . cannot be confirmed without the claim holder’s consent. . . . A bankruptcy court lacks the authority to confirm any plan unless it “complies with the provision[s] of this chapter and with the other applicable provisions of this title.” . . . Debtor’s proposed plan did not comply with § 1322(a)(2). As a result of this failure, any supposed confirmation was nugatory and properly dismissed. . . . Mandatory requirements such as § 1322(a)(2), by definition, cannot be absent from a confirmable Chapter 13 plan. . . . We conclude that this Plan was invalid for failing to include the mandatory provisions of § 1322(a)(2), and has no res judicata effect as to the omitted priority claims.35
[12]

Had the Seventh Circuit observed that 80 years of payments at $25 per month constituted cause for dismissal, Escobedo would receive a nod and be of concern to few.36 That the Seventh Circuit latched onto § 1322(a)(2) as the source of cause for dismissal five years after confirmation is a problem.

[13]

11 U.S.C. § 1322(a)(2) mandates that a Chapter 13 plan provide for full payment of claims entitled to priority under § 507.37 Failure to comply with § 1322(a)(2) would have been a sure knockout objection to confirmation had it been raised in Escobedo. The IRS and the Chapter 13 trustee had notice that the plan did not comply with § 1322(a)(2). Neither objected to confirmation. Confirmation should have precluded collateral attack on the plan in the guise of a motion to dismiss.38

[14]

To the extent Escobedo suggests that a motion to dismiss after confirmation is a mechanism for creditors or the trustee to test compliance of the plan with the conditions for confirmation, Escobedo is misguided.39 Although not very satisfying, the Seventh Circuit subsequently confined Escobedo to its § 1322(a) context.40


 

1  Ekeke v. United States, 133 B.R. 450 (S.D. Ill. 1991) (That the debtor had in excess of $100,000 of unsecured debt and the confirmed plan proposed to pay the IRS only 10% of its priority claim were “cause” for dismissal after confirmation. No creditor objected to confirmation. IRS filed a preconfirmation proof of claim for $104,000, but eligibility and treatment of IRS were first raised in government’s motion to dismiss after confirmation. The case included no discussion of § 1327.); In re Vaughn, 276 B.R. 323 (Bankr. D.N.H. 2002) (Chapter 13 case is dismissed because debtor exceeds debt limitations and is not eligible.); In re Stern, 266 B.R. 322 (Bankr. D. Md. 2001) (Cause for dismissal that debtor is ineligible to convert from Chapter 7 to Chapter 13.); In re Setelin, 218 B.R. 818, 820 (Bankr. E.D. Va. 1998) (That unsecured debt exceeds the $250,000 limit for eligibility is cause for dismissal, and creditor’s motion to dismiss was timely filed after the 45-day limit under local rules for filing objections to confirmation but before confirmation of a plan. Court distinguishes cases that hold that dismissal for ineligibility is barred by confirmation of a plan. “[T]he bankruptcy code and rules do not place time limits on filing a motion to dismiss based on eligibility. . . . The court finds no authority for holding that a creditor must file a motion to dismiss pursuant to § 109(e) and § 1307(c) within the 45 days allowed for objections to confirmation under Local Rule.”); Wisconsin v. Weller (In re Weller), 189 B.R. 467 (Bankr. E.D. Wis. 1995) (Cause for dismissal that state court has determined that Wisconsin has a noncontingent, liquidated, unsecured claim of $278,928.60 for violations of unfair rental practices laws, and thus the debtor is not eligible for Chapter 13 relief.); In re Jones, 174 B.R. 8 (Bankr. D.N.H. 1994) (That the debtor did not have sufficient current income to be an “individual with regular income” for purposes of eligibility was one cause for dismissal. Funding plan from litigation against the University of Pittsburgh was too uncertain to constitute regular income.), aff’d per curiam, 77 F.3d 460 (1st Cir. 1996); In re Koehler, 62 B.R. 70 (Bankr. D. Neb. 1986). See also In re Woods, 248 B.R. 322, 322 (Bankr. W.D. Tenn. 2000) (“[A] guardian (or conservator) may file a voluntary bankruptcy petition for a debtor-ward, if authorized by the guardianship court (or perhaps the guardian). . . . Neither the conservator appointing court . . . nor the conservator authorized the filing of this chapter 13 case. . . .  This is cause under the circumstances warranting a case dismissal.”); In re Elstien, 238 B.R. 747, 753–57 (Bankr. N.D. Ill. 1999) (Ineligibility argument is precluded by confirmation, but it is cause for dismissal after confirmation that the debtor intentionally did not schedule large debts to IRS and Illinois Department of Revenue. IRS informed the debtor of a trust fund recovery penalty of $553,427.50, and the Illinois Department of Revenue notified him of claims for sales tax and trust fund taxes. Debtor did not reveal these debts in schedules or statement. The IRS was aware of the debtor’s bankruptcy. “The Debtor filed false schedules, when accurate schedules would have disclosed that he was ineligible for chapter 13 relief . . . . The IRS . . . had actual knowledge of the bankruptcy case in ample time to . . . object to confirmation of the plan, yet it did nothing for two years. . . . [T]he order of confirmation has res judicata effect as against the IRS with respect to the question of eligibility for chapter 13 relief. . . . It is less clear that the IRS should be barred from raising other grounds for dismissal, such as the Debtor’s conduct with respect to the schedules and statements of financial affairs. . . . Although the IRS may now be barred from challenging the Debtor’s eligibility, there is no compelling authority that precludes it from asserting that the Debtor’s conduct constitutes cause for dismissal.”).

 

2  See §§ 20.1 [ Court-Imposed Restrictions on Eligibility to Refile ] § 24.1  Court-Imposed Restrictions on Eligibility to Refile and 339.1 [ Court-Imposed Conditions and Restrictions on Dismissal ] § 153.3  Court-Imposed Conditions and Restrictions on Dismissal See, e.g., In re Vanfossen, 258 B.R. 814 (Bankr. N.D. Ala. 2001) (Eighth Chapter 13 in less than six years is dismissed with prejudice and with sanctions; eighth case violated prior order prohibiting refiling.); In re McCoy, 237 B.R. 419 (Bankr. S.D. Ohio 1999) (Debtor’s eighth bankruptcy case is dismissed with prejudice based in part on the debtor’s history of filing bankruptcy cases in violation of court orders precluding subsequent filings.).

 

3  In re Washington, 297 B.R. 662, 664 (Bankr. S.D. Fla. 2003) (“A petition is a legal nullity if the signature on the petition is forged, even if the party forging the signature had a Power of Attorney, if there was no indication that the document was signed in a representative capacity.”).

 

4  Dudley v. Powers (In re Dudley), 273 B.R. 197, 199 (B.A.P. 8th Cir. 2002) (Cause for dismissal under § 1307(c) includes “failure to file a plan timely.”); Simmons v. Cosby (In re Simmons), 256 B.R. 578 (D. Md. 2001) (Cause for dismissal that pro se debtor failed to timely file a plan as required by § 1307(c)(3).); In re Funk, 146 B.R. 118 (D.N.J. 1992) (Debtors’ failure to file a plan within the year after the petition weighs heavily in support of the bankruptcy court’s decision to deny conversion to Chapter 11 and instead to dismiss the Chapter 13 case.); In re Maurice, 167 B.R. 114, 123–24 (Bankr. N.D. Ill. 1994) (Failure to timely file Chapter 13 plan, schedules and statements is cause for dismissal. “A Chapter 13 debtor’s failure to file a plan, as required by Rule 3015(b), alone warrants dismissal of the case. . . . The failure to timely file a Chapter 13 statement and plan after entry of an order to file same within fifteen days warranted dismissal of the case, absent a showing of excusable neglect. . . . The language of both section 1321 and Rule 3015(b) is mandatory, not directory.”); In re Green, 141 B.R. 440, 442 (Bankr. M.D. Fla. 1992) (Although § 1307(c)(9) provides for dismissal “on the request of the United States trustee” when the debtor failed to file accurate statements and schedules in violation of § 521(1), “the bases for dismissal of a Chapter 13 case outlined in § 1307 are not exhaustive, and this Court is satisfied that a Chapter 13 case may be dismissed for the Debtor’s failure to comply with § 521(1) upon either the Motion of a creditor or the Court’s own Motion.” Amendment of schedules to include omitted property “is of no consequence inasmuch as an amendment to the Schedules does not cure the failure to originally schedule an asset.”); In re Greene, 127 B.R. 805, 807 (Bankr. N.D. Ohio 1991) (It is cause for dismissal sua sponte, though without prejudice, when debtor missed mandatory 15-day time limits in Bankruptcy Rules 3015 and 1007(c) by nine days. Counsel offered no excuse for missing the deadlines and no assurance that counsel or the debtors would meet future deadlines. “[T]he failure to meet a mandatory deadline cannot be cured by the simple expedient of filing the required papers before the court’s show cause hearing.”). See the restriction on standing to seek conversion or dismissal for failure of the debtor to timely file statement and schedules in 11 U.S.C. § 1307(c)(9), discussed in § 53.14  Seek Conversion or Dismissal, § 141.2  Conversion on Request of Creditor or Trustee, § 152.1  Procedure, Timing and Form and § 152.3  Cause for Dismissal Added or Changed by BAPCPA.

 

5  In re Wright, 300 B.R. 453 (Bankr. N.D. Ill. 2003).

 

6  In re Nimmo, 39 B.R. 5 (Bankr. D.N.M. 1984); In re Elkin, 5 B.R. 21 (Bankr. S.D. Cal. 1980).

 

7  See Howard v. Lexington Inv., Inc., 284 F.3d 320 (1st Cir. 2002) (Bankruptcy court did not abuse its discretion by dismissing petition when Chapter 13 debtor failed to comply with court order to file state income tax returns.); In re Graffy, 233 B.R. 894, 897 (Bankr. M.D. Fla. 1999) (IRS entitled to attorney fees as sanction under Bankruptcy Rule 9011 for serial filings of Chapter 13 cases. “Debtor’s sole motive behind filing the three bankruptcy cases was either to circumvent this Court’s Orders concerning the filing of his tax returns, or to interrupt the collection efforts of the IRS.”); Cobb v. Hulsey (In re Cobb), 216 B.R. 676 (Bankr. M.D. Fla. 1998) (Cause for dismissal of pro se tax protester’s Chapter 13 petition that debtors refused to obey court order requiring the filing of tax returns, debtors demonstrated a lack of good faith by seeking confirmation of a plan that did nothing except defeat the claims of the IRS, debtors failed to propose a feasible plan and debtors filed scandalous and contemptuous documents.); In re Nygaard, 213 B.R. 877 (Bankr. M.D. Fla. 1997) (Cause for dismissal that debtors failed to file tax returns as required by preconfirmation order concerning the filing of tax returns routinely entered in Chapter 13 cases.); In re Koval, 205 B.R. 72 (Bankr. N.D. Tex. 1996) (Cause for dismissal with injunction against refiling for two years that debtor failed to file postpetition tax returns and failed to pay postpetition taxes for himself or for wholly owned professional corporation. Debtor filed Chapter 13 soon after discharge in Chapter 7 case, and IRS was only real creditor. Debtor sat in Chapter 13 case from 1991 to 1996 without filing tax returns or paying federal income taxes. Although 1993 general order requiring timely filing of postpetition federal tax returns in Chapter 13 cases was not applicable, debtor violated “the spirit of the general order.”); In re Maclean, 200 B.R. 417 (Bankr. M.D. Fla. 1996) (Cause for dismissal with prejudice to refiling for 180 days where pro se debtor ignored bankruptcy court’s “Duties Order,” which required the filing of income tax returns.); In re Tobias, 200 B.R. 412 (Bankr. M.D. Fla. 1996) (Debtors’ failure to file tax returns notwithstanding repeated court orders to do so is bad faith justifying dismissal for cause. Filing of “declarations” does not satisfy court orders that the debtors file tax returns.); In re Hahn, 200 B.R. 249 (Bankr. M.D. Fla. 1996) (Failure to comply with an order to file tax returns is bad faith and cause for dismissal.).

 

8  See, e.g., Badalyan v. Holub (In re Badalyan), 236 B.R. 633 (B.A.P. 6th Cir. 1999) (Cause for dismissal of Chapter 13 plan included that the debtor failed to comply with a court order to amend the plan and failed to file a memorandum in opposition to dismissal.); Fernandez v. GE Capital Mortgage Servs., Inc. (In re Fernandez), 227 B.R. 174, 178 (B.A.P. 9th Cir. 1998) (Cause for dismissal that debtor failed to file required documents. “The bankruptcy court correctly noted that, under the pertinent general orders and LBR 180, the clerk of the court may, after a written notice, dismiss cases when debtors do not comply with filing requirements. Here, Fernandez did not comply with filing requirements, the clerk gave notice, and then finally dismissed the case.”); Schmidt v. Griffin (In re Schmidt), 215 B.R. 208 (D. Kan. 1997) (Cause for dismissal that the debtors did not file an amended plan after being instructed to do so.); In re Reese, No. 4:02-BK-10999 E, 2002 WL 32114486, at *2 (Bankr. E.D. Ark. Sept. 4, 2002) (unpublished) (Cause for dismissal that “Debtor has failed to amend his plan despite three court orders directing him to do so. Furthermore, the Debtor has not made a plan payment . . . . Finally, the Debtor has failed to license [a homemade barbeque pit and mobile concession stand] as required by the agreed order.”); In re Campbell, 266 B.R. 709 (Bankr. W.D. Ark. 2001) (Failure to comply with court order to file required documents in third Chapter 13 petition within five months warrants dismissal with prejudice to refiling for 180 days.); In re McCoy, 237 B.R. 419 (Bankr. S.D. Ohio 1999) (Debtor’s eighth bankruptcy case is dismissed with prejudice in part because debtor failed to file required schedules, statement of affairs and plan and failed to attend creditors’ meeting as ordered by the court.); In re Adair, 212 B.R. 171, 173 (Bankr. N.D. Ga. 1997) (Cause for dismissal if debtor does not supply social security number within 14 days of order. Court rejects debtor’s argument that the Federal Privacy Act excuses debtor’s failure to supply social security number on Chapter 13 petition. Federal Privacy Act “does not apply to federal courts.”).

 

9  See below in this section.

 

10  See, e.g., Alt v. United States (In re Alt), 251 B.R. 831 (W.D. Mich. 2000) (Cause for dismissal that debtor omitted a $300,000 tax claim and testified at a deposition that she could not remember her current address, her telephone number, the location of her personal checking account, or the amount she was paid by her professional corporation.); In re Wright, 300 B.R. 453 (Bankr. N.D. Ill. 2003) (Intentional failure to schedule a known creditor or to list the creditor’s proper address can be cause for dismissal under § 1307(c).); In re Shaheen, 268 B.R. 455 (Bankr. E.D. Va. 2001) (Chapter 13 case dismissed with prejudice to refiling based in part on evidence that petition, schedules and statement of financial affairs were materially in error—assets were omitted or undervalued; debts were inaccurate.); In re McNichols, 254 B.R. 422 (Bankr. N.D. Ill.) (Cause for dismissal that the debtor misled the court, the trustee and creditors with inaccuracies in the budget, by failing to account for an $850 per month 401(k) plan contribution and with inconsistent testimony through four attempts at confirming a plan.), motion to alter or amend denied, 255 B.R. 857 (Bankr. N.D. Ill. 2000).

 

11  See, e.g., Simmons v. Cosby (In re Simmons), 256 B.R. 578 (D. Md. 2001) (Cause for dismissal that pro se debtor did not attend meeting of creditors as required by § 1307(c)(1).); In re Hall, 266 B.R. 659, 660 (Bankr. W.D. Ky. 2001) (Debtor’s failure to appear at § 341 meeting because “he needed to be out of town for work and couldn’t afford to miss several days of salary” is cause for dismissal. “Mr. Hall failed to demonstrate exceptional circumstances which would excuse his attendance from the 341 meeting. . . . All debtors are required to be absent from work or other obligations to appear for the 341 meeting.”).

 

12  In re Pickeral, 267 B.R. 1, 6 (Bankr. D.D.C. 2001) (“Although generally a dismissal of a civil action for lack of proper venue is without prejudice, this bankruptcy case is different. . . . [T]he debtor deliberately filed in the wrong venue when the debtor feared that she had insufficient time to file in the proper district before the foreclosure sale was scheduled to occur. Obtaining that automatic stay was knowingly wrongful, and a dismissal without prejudice would let the debtor have the fruits of her wrongful conduct.”).

 

13  See § 44.4  Consequences of Failure to Commence Payments§ 44.6  Preconfirmation Payments after BAPCPA and § 53.9  Ensure Debtor Commences Making Timely Payments. See, e.g., In re McDonald, 118 F.3d 568 (7th Cir. 1997) (Cause for dismissal under § 1307(c)(4) that debtor was 10 days late making first payment under § 1326(a)(1). At the hearing on the trustee’s motion to dismiss, the debtor’s attorney did not offer any reason for the tardiness, and the explanation given in the debtor’s written response to the trustee’s motion was “so mundane” that bankruptcy court did not abuse discretion in dismissing the case notwithstanding that bankruptcy judge was apparently unaware of the written response.); Simmons v. Cosby (In re Simmons), 256 B.R. 578 (D. Md. 2001) (Cause for dismissal that pro se debtor failed to commence making payments as required by §§ 1326(a)(1) and 1307(c)(4).); In re Beckham, No. 01-31745, 2002 WL 32139303 (Bankr. W.D.N.C. Jan. 23, 2002) (unpublished) (Cause for dismissal that the debtor failed to commence payments within the 30 days required by § 1326(a)(1) notwithstanding explicit instructions from counsel, including pre-addressed payment envelopes.); In re Dent, 275 B.R. 625 (Bankr. M.D. Ala. 2002) (Failure to commence making payments in second Chapter 13 case filed less than two months after dismissal for nonpayment of prior Chapter 13 case is cause for dismissal under § 1307(c)(4).); In re Nosker, 267 B.R. 555 (Bankr. S.D. Ohio 2001) (Cause for dismissal under § 1307(c)(4) that case was pending for a year but debtor failed to commence making payments required by § 1326(a).); In re Haugland, 199 B.R. 125, 129 (Bankr. D.N.J. 1996) (Cause for dismissal that debtor failed to commence making payments into the plan. “Debtor has provided no reason to believe that any payments have been made or will be made.”); In re Jones, 174 B.R. 8, 12 (Bankr. D.N.H. 1994) (“The debtor filed his original chapter 13 plan on October 12, 1993. No payments were made under that plan and, in fact, the plan did not provide for payments. On March 14, 1994, the debtor filed an amended plan which provided for payments of $10.00 per month, which the chapter 13 trustee confirms the debtor has been making through the July 6, 1994 hearing. The $10.00 per month payments continue under the amended plan until the debtor recovers funds from the University of Pittsburgh, which is the subject of an adversary proceeding, at which time, if ever, payments to the chapter 13 trustee increase to $600.00 per month. There is no guarantee that the funds will ever be received from the University of Pittsburgh and the $10.00 per month payment over the debtor’s five year plan would come to a total of $600.00, an amount insufficient to meet the requirements of section 1322(a)(2). . . . The Court finds that the debtor has failed to make payments to the chapter 13 trustee required by section 1326, which, by itself, is grounds for dismissal.”), aff’d per curiam, 77 F.3d 460 (1st Cir. 1996).

 

14  See, e.g., Davis v. Mather (In re Davis), 239 B.R. 573 (B.A.P. 10th Cir. 1999) (Cause for dismissal that debtor did not have resources to cure defects in plan.); Badalyan v. Holub (In re Badalyan), 236 B.R. 633 (B.A.P. 6th Cir. 1999) (Cause for dismissal that Chapter 13 plan failed to comply with mandatory and permissive provisions of § 1325.); Schmidt v. Griffin (In re Schmidt), 215 B.R. 208 (D. Kan. 1997) (Cause for dismissal that $100-per-month proposed payment cannot satisfy the confirmation requirement of full payment of a priority tax claim exceeding $25,000.); Chambers v. Countrywide Home Loans, Inc. (In re Chambers), Nos. 02-34627DWS, 02-1375, 2003 WL 22996980 (Bankr. E.D. Pa. Dec. 10, 2003) (unpublished) (Cause for dismissal that debtor cannot propose a confirmable plan: gross income of $450 per month will not pay secured debt and taxes without provision for unsecured claim of mortgage holder if debtor succeeds in adversary proceeding for rescission.); In re Soost, 290 B.R. 116, 133 (Bankr. D. Minn. 2003) (“[D]enial of confirmation of a plan on objection by a party in interest, coupled with the patent inability to propose a confirmable plan, constitutes cause for dismissal of a Chapter 13 case.”); In re Famisaran, 224 B.R. 886, 893 (Bankr. N.D. Ill. 1998) (“Denial of confirmation of the third amended plan, when coupled with the false, misleading and inaccurate filing of the Statement of Financial Affairs and Schedules I and J further warrants the dismissal of the bankruptcy case.”); In re Pruitt, 203 B.R. 745 (Bankr. N.D. Okla. 1996) (Cause for dismissal that debtor’s proposed plan cannot be confirmed because it fails to properly provide for IRS’s secured claim, fails to properly provide for IRS’s priority claim, unfairly discriminates against some unsecured claims and is not feasible.).

 

15  See Vomhof v. United States, 207 B.R. 191, 193 (D. Minn. 1997) (Tax protestors’ Chapter 13 case was appropriately dismissed for “unreasonable delay by the debtor that is prejudicial to creditors” under § 1307(c)(1) when debtors failed to comply with bankruptcy court order to file tax returns.); In re Nosker, 267 B.R. 555, 562 (Bankr. S.D. Ohio 2001) (Cause for dismissal under § 1307(c)(1) that case was pending for a year but debtor “has yet to propose a plan that comes close to meeting the confirmation standards.”); In re Nassar, 216 B.R. 606, 608 (Bankr. S.D. Tex. 1998) (Cause for dismissal that debtor has created prejudicial delay by failing to provide accurate and complete information to creditors and the Chapter 13 trustee during more than a year of effort to get accurate statements and schedules. Debtor failed to account for corporations wholly owned by the debtor, debtor testified that schedules of income and expenses were incomplete and inaccurate, debtor failed to schedule the ownership of corporations that paid the debtor income and debtor failed to reveal conveyances of property for no consideration to the debtor’s wife. “Debtor has failed to provide the Trustee and the court with adequate information on which to base a determination of whether Debtor’s plan meets the requirements for confirmation. . . . [T]he delay occasioned by Debtor’s failure to provide accurate and complete information is prejudicial to the creditors.”); In re Pruitt, 203 B.R. 745 (Bankr. N.D. Okla. 1996) (Debtor’s unwillingness or inability to propose a confirmable plan constitutes unreasonable delay that is prejudicial to creditors under § 1307(c)(1).); In re Spear, 203 B.R. 349 (Bankr. D. Mass. 1996) (Cause for dismissal under § 1307(c)(1) that debtor “unreasonably delayed” creditors by filing three Chapter 13 petitions to stop foreclosures with no intention of completing the cases. Debtor made repeated requests for continuances, never filed schedules or a plan and third case was dismissed with prejudice to refiling for 180 days.); In re Bennett, 200 B.R. 252, 254–55 (Bankr. M.D. Fla. 1996) (“The continued failure of the Debtor to pay both income and employment tax liabilities following the confirmation of the Chapter 13 plan is an unreasonable delay that is prejudicial to the United States of America as a prepetition and postpetition creditor of the Debtor. Sufficient cause exists to dismiss.”); In re Rosencranz, 193 B.R. 629, 637 (Bankr. D. Mass. 1996) (“I find that dismissal is warranted due to the unreasonable delay by the Debtor in this case. The Debtor has twice amended his Schedules and has yet to file ones that are accurate. The Debtor has filed an unconfirmable plan. . . . These delays have prejudiced the creditors in that they have been unable to receive the total amounts which are due to them. Because of the delay in this case to date and the Debtor’s abuse of the Code, I conclude that the case should not be converted but dismissed.”).

 

16  Roberts v. Boyajian (In re Roberts), 279 F.3d 91 (1st Cir. 2002) (Cause for dismissal that completion of 60 monthly payments consistent with confirmed plan is insufficient to pay the guaranteed 10% dividend because substantial postpetition tax claims were filed and allowed. Confirmed plan also required the debtors to pay allowed postpetition claims. Failure to pay postpetition tax claims in full constitutes a material default under § 1307(c)(6).); Murray v. Norstar Mortgage Corp., No. 01-5055, 2002 WL 337916 (2d Cir. 2002) (unpublished) (Bankruptcy court appropriately dismissed Chapter 13 petition based on defaults in payments after confirmation.); In re Sando, 30 B.R. 474 (E.D. Pa. 1983) (Debtors stipulated they would make payments in settlement of stay relief litigation but failed to make the payments.); In re King, 217 B.R. 623, 626 (Bankr. S.D. Cal. 1998) (Cause for dismissal that debtor stopped making plan payments when prepetition creditors were paid in full, but there remained unpaid a large postpetition tax claim that was entitled to priority and full payment through the plan. The debtor’s plan provided that all priority and § 1305(a)(1) claims would be paid in full. After the completion of payments on prepetition claims, the IRS filed its claim for postpetition taxes, and without dispute, the postpetition claim was allowable and was a priority claim that must be satisfied in full under the confirmed plan. Debtor ceased making plan payments when prepetition creditors were paid in full. On the trustee’s motion to dismiss, “[s]ince substantial tax claims remain unpaid, the Court finds dismissal for nonpayment is warranted.”); In re Barrett, 149 B.R. 494 (Bankr. N.D. Ohio 1993) (On remand, it is cause for dismissal where during four years of creditor’s appeal of confirmation, debtor made payments to the Chapter 13 trustee totaling more than $25,000, but debtor failed to pay or save the regular monthly mortgage payments that the debtor was required to pay directly to the bank. Though debtor was successful on appeal, when the case came back to the bankruptcy court, the debtor was more than $20,000 behind in direct payments to the bank.); In re Marzocchi, 60 B.R. 657 (Bankr. D.R.I. 1986); In re Belanger, 60 B.R. 656 (Bankr. D.R.I. 1986); Estes v. Garcia, 42 B.R. 33 (Bankr. D. Colo. 1984) (Failure to make payments directly to a creditor as required by plan is cause.).

 

17  In re White, 126 B.R. 542 (Bankr. N.D. Ill. 1991). Accord In re King, 217 B.R. 623 (Bankr. S.D. Cal. 1998) (Cause for dismissal that after completion of payment of prepetition creditors in a 55-month plan, debtor stopped making payments but there remained unpaid an allowed claim for postpetition taxes of $33,534.14 that the debtor could not pay in full within the 60-month time limit.).

 

18  In re Cummins, 266 B.R. 852 (Bankr. N.D. Iowa 2001).

 

19  See Pagnac v. Minnesota Dep’t of Rev. (In re Pagnac), 228 B.R. 219 (B.A.P. 8th Cir. 1998) (Cause for dismissal that confirmed plan was “an impossibility” once the court correctly determined that the three-year lookback for the priority of taxes was tolled during the debtor’s prior Chapter 12 case. The $100 per month that the debtor will pay into the plan is not sufficient to pay the priority claim in full.); In re Goude, 201 B.R. 275 (Bankr. D. Or. 1996) (Cause for dismissal that debtors have made 60 monthly payments called for by the confirmed plan but priority claims were larger than expected and cannot be paid in full. Since the debtors are neither entitled to a discharge nor able to modify the plan, dismissal “must be granted.”); In re Jackson, 189 B.R. 213, 214 (Bankr. M.D. Ala. 1995) (Cause for dismissal that plan has exceeded five-year maximum duration under § 522(d). “[N]o Chapter 13 plan can run for more than five years. . . . Payments under a Chapter 13 Plan must begin within 30 days of the commencement of the case. . . . The maximum duration of any Chapter 13 plan under § 1322(d) will expire five years after the date of the initial payment under the plan. In this case, the first payment to the Trustee was made on March 2, 1990. Therefore, the five year period terminated on March 2, 1995.” Chapter 13 trustee’s motion to dismiss is granted.).

 

20  See, e.g., In re Dulisse, No. CIV.A. 01-1385, 2001 WL 769994, *2 (E.D. Pa. July 5, 2001) (Petition filed a few days before foreclosure sale was properly dismissed for cause based in part on “the chronology of the bankruptcy filings in relation to the dates of the sheriff’s sales is evidence that the petitions were not intended for reorganization, but to delay the foreclosure sales.”); In re Shaheen, 268 B.R. 455 (Bankr. E.D. Va. 2001) (Chapter 13 petition filed solely to defeat collection of assault judgment declared nondischargeable in prior Chapter 7 case is dismissed with prejudice to refiling for one year.); In re Vincente, 260 B.R. 354 (Bankr. E.D. Pa. 2001) (Cause for dismissal that debtor proposes to treat mortgage holder “outside the plan” without payments but subject to the automatic stay. Debtor does not have present financial ability to pay mortgage in or outside the plan, and proposal to make no payment but continue to use the automatic stay serves no valid bankruptcy purpose. Bankruptcy court rejects debtor’s alternative request to convert when the only apparent purpose would be to continue the stay against the mortgage holder.); In re Kerschner, 246 B.R. 495 (Bankr. M.D. Pa. 2000) (Cause under § 1307(c) that the debtor filed Chapter 13 the day before a contempt hearing in state court with respect to the debtor’s failure to comply with an orphan’s court order to return cash and personal property taken from an estate.); In re Head, 223 B.R. 648 (Bankr. W.D.N.Y. 1998) (Cause for dismissal that Canadian residents filed Chapter 13 cases in the United States to “unfairly” interfere with litigation in England and elsewhere over their liability as “names” in insurance syndicates with Lloyd’s of London.).

 

21  See Greatwood v. United States (In re Greatwood), 194 B.R. 637, 640–41 (B.A.P. 9th Cir. 1996) (Affirms dismissal of tax protestor’s Chapter 13 filed solely to deal with tax claims that survived discharge in prior Chapter 7 case. “We find ample basis to affirm the dismissal of the case based upon the debtor’s bad faith, evidenced by his failure to file federal income tax returns. . . . [T]he debtor is a tax protestor who denies that the wages he received were taxable. . . . [T]he debtor proposed no payment to the I.R.S.”); Salter v. IRS (In re Salter), 251 B.R. 689 (S.D. Miss. 2000) (Pro se tax protestor’s second Chapter 13 case was properly dismissed for failure to provide for tax claims based on principles of res judicata when prior Chapter 13 case was dismissed for exactly the same reason.); Hopkins v. United States (In re Hopkins), 201 B.R. 993, 998 (D. Nev. 1996) (Cause for dismissal that debtors filed frivolous tax returns and Chapter 13 petition was filed “solely as an alternative forum for the resolution of a tax dispute.”); Vines v. IRS (In re Vines), 200 B.R. 940, 945 (M.D. Fla. 1996) (Cause for dismissal “with prejudice” that tax protestor filed one Chapter 13 case in North Carolina and two Chapter 13 cases in the Middle District of Florida contending in each that he did not have to file tax returns and did not owe taxes notwithstanding court orders to file tax returns and valid proofs of claim by the IRS.); In re Bertelt, 250 B.R. 739, 746–47 (Bankr. M.D. Fla. 2000) (Dismissal with prejudice to refiling for 180 days is appropriate remedy for a tax protestor who has filed three bankruptcy cases to defeat the payment of taxes. “Various courts have dismissed Chapter 13 cases with prejudice for failure to file tax returns. . . . This use of the bankruptcy court by the debtor solely as an alternative forum for the resolution of a tax dispute was indicative of the debtor’s bad faith . . . . Courts have also determined that tax returns filed with zeros for line items are not proper tax returns for purposes of Chapter 13 cases and warrant dismissal. . . . [B]ankruptcy courts have looked with disfavor upon solvent debtors’ use of the filing of a Chapter 13 petition to thwart the collection efforts of the IRS.” Debtor’s claim that Florida was a “foreign country” was “utterly without merit.”); In re Davis, 239 B.R. 305, 306 (Bankr. D. Md. 1999) (Pro se tax protestor’s fifth bankruptcy case is dismissed “with prejudice for a year in order to enable the parties to work out their disputes.”); In re Graffy, 233 B.R. 894, 897 (Bankr. M.D. Fla. 1999) (IRS entitled to attorney fees as sanction under Rule 9011 for the debtor’s serial filings of Chapter 13 cases with knowingly false documents. “Debtor substantially undervalued personal property . . . significantly understated his income . . . failed to mention any transfer of estate assets . . . . Debtor’s sole motive behind filing the three bankruptcy cases was either to circumvent this Court’s Orders concerning the filing of his tax returns, or to interrupt the collection efforts of the IRS. . . . Debtor has violated the ‘bad faith/improper purpose’ prong of Rule 9011.” $7,748.21 for 244.5 hours at $31.69 per hour was awarded.); In re Brooks, 216 B.R. 838, 843 (Bankr. N.D. Okla. 1998) (Cause for dismissal that second Chapter 13 case was filed for the sole purpose of litigating the validity of a disputed tax claim. Agreeing with In re Fooks, 139 B.R. 623 (Bankr. D. Md. 1992), “Congress did not establish the bankruptcy court system for the purpose of giving debtors an alternate forum for litigating issues with taxing authorities.”); Cobb v. Hulsey (In re Cobb), 216 B.R. 676 (Bankr. M.D. Fla. 1998) (Cause for dismissal of pro se tax protester’s Chapter 13 petition that debtors refused to obey court order requiring the filing of tax returns, debtors demonstrated a lack of good faith by seeking confirmation of a plan that did nothing except defeat the claims of the IRS, debtors failed to propose a feasible plan and debtors filed scandalous and contemptuous documents.); In re Hovind, 197 B.R. 157, 160–61 (Bankr. N.D. Fla. 1996) (Cause for dismissal in advance of confirmation where tax protestor claiming to be an evangelist employed by God filed false statements and schedules indicating no income, no expenses and no property. Acknowledging that “ordinarily a chapter 13 case should not be dismissed for lack of good faith prior to consideration of a chapter 13 plan,” under “limited circumstances” preconfirmation dismissal for lack of good faith is appropriate. “The debtor having failed to file his federal income tax returns for at least the years 1989 through 1995, having resisted collection efforts by the IRS, and having provided false information in his schedules and statement of affairs in connection with this case, I find that the debtor filed this petition in bad faith and as such the petition is subject to dismissal for cause under the provisions of 11 U.S.C. § 1307(c).”); In re Burrell, 186 B.R. 230, 234 (Bankr. E.D. Tenn. 1995) (It is cause for dismissal that debtor is a tax protester convicted of multiple counts of rape, sexual battery and coercion of witnesses and sentenced to 24 years in prison. Pro se petition proposes to pay $159.63 per month toward a $221,096.85 claim of the IRS, $25,600 of which is entitled to priority. “[T]he debtor’s failure to file his income tax returns for 1986 through 1994, combined with the fact that this bankruptcy case was initiated primarily to further the debtor’s tax protest, constitutes bad faith.”); In re Crayton, 169 B.R. 243, 245 (Bankr. S.D. Ga. 1994) (It is cause for dismissal that the debtor failed to file tax returns for six years prior to filing bankruptcy and did not correct the problem during the six months that the Chapter 13 case was pending, notwithstanding being told to do so by the Chapter 13 trustee. “Debtor has enjoyed protection from collection activities by his creditors, including the IRS, while his case is pending, yet shows no sense of any duty to file his federal tax returns. Such behavior is the epitome of a lack of good faith on the part of Debtor and demands dismissal.”); In re Spurgeon, 166 B.R. 150 (Bankr. D. Neb. 1993) (It is cause for dismissal where debtor has admitted that he does not have the ability to pay the claim of the IRS in full, and the Chapter 13 case was filed solely to delay the collection of taxes.).

 

22  See § 103.1  In General§ 109.1  Smell Tests and discussion beginning at § 104.1  In General, § 105.1  Prepetition Conduct and Misconduct—In General, § 106.1  In General, § 107.1  Greed, Not Need and § 108.1  Economic Components of Good Faith—In GeneralSee, e.g., Alt v. United States (In re Alt), 305 F.3d 413, 418–19 (6th Cir. 2002) (“Despite the fact that there are no such reported decisions in this circuit, there is abundant authority for the notion that a bankruptcy court has the power to dismiss a Chapter 13 petition upon a finding that the debtor did not bring it in good faith. . . . ‘Our circuit’s good faith test requires consideration of the totality of the circumstances.’”); Neary v. Padilla (In re Padilla), 222 F.3d 1184, 1192–93 (9th Cir. 2000) (In dicta, in a Chapter 7 case, “we have held that bad faith does provide ‘cause’ to dismiss Chapter 11 and Chapter 13 bankruptcy petitions. . . . The Bankruptcy Code specifically mentions good faith in Chapters 11 and 13 when it permits a court to confirm a payment plan only if it is proposed in good faith. No mention of good faith or bad faith is made in Chapter 7. Also, the post-filing debtor-creditor relationship is markedly different in liquidation and reorganization bankruptcies. . . . In [Eisen v. Curry (In re Eisen), 14 F.3d 469 (9th Cir. 1994),] we linked the good faith requirement implicit in a Chapter 13 bankruptcy with the good faith requirement for proposing a payment plan when we stated that ‘[t]o determine if a petition has been filed in bad faith courts are guided by the standards used to evaluate whether a plan has been proposed in bad faith.’ . . . The Bankruptcy Code’s language and the protracted relationship between reorganization debtors and their creditors lead us to conclude that bad faith per se can properly constitute ‘cause’ for dismissal of a Chapter 11 or Chapter 13 petition but not of a Chapter 7 petition under § 707(a).”); Gier v. Farmers State Bank (In re Gier), 986 F.2d 1326 (10th Cir. 1993) (Citing In re Love, 957 F.2d 1350 (7th Cir. 1992), with approval, “in determining whether a Chapter 13 petition has been filed in bad faith under § 1307(c), the bankruptcy court must consider the ‘totality of the circumstances.’ . . . This approach is as appropriate for a 1307(c) inquiry as it is for a 1325(a)(3) inquiry. . . . Although we agree that the rejection of a Chapter 13 plan [on good-faith grounds] should not necessarily lead to dismissal, it is a factor for the bankruptcy court to consider as it determines whether to dismiss the petition pursuant to 1307(c).”); Leavitt v. Soto (In re Leavitt), 209 B.R. 935 (B.A.P. 9th Cir. 1997), aff’d, 171 F.3d 1219, 1223–24 (9th Cir. 1999) (“Although not specifically listed, bad faith is a ‘cause’ for dismissal under § 1307(c). . . . We hold that bad faith is ‘cause’ for a dismissal of a Chapter 13 case with prejudice under § 349(a) and § 1307(c). . . . Bad faith, as cause for the dismissal of a Chapter 13 petition with prejudice, involves the application of the ‘totality of the circumstances’ test. . . . The bankruptcy court should consider the following factors: (1) whether the debtor ‘misrepresented facts in his [petition or] plan, unfairly manipulated the Bankruptcy Code, or otherwise [filed] his Chapter 13 [petition or] plan in an inequitable manner,’ . . . . (2) ‘the debtor’s history of filings and dismissals,’ . . . . (3) whether ‘the debtor only intended to defeat state court litigation,’ . . . . and (4) whether egregious behavior is present . . . . A finding of bad faith does not require fraudulent intent by the debtor.”); In re Love, 957 F.2d 1350 (7th Cir. 1992) (Lack of good faith is “cause” for dismissal under § 1307(c). The standard for good faith for dismissal under § 1307(c) is similar but not precisely the same as the standard for good faith with respect to the plan under § 1325(a)(3). “[W]e agree that the bankruptcy court should be more reluctant to dismiss a petition under Section 1307(c) for lack of good faith than to reject a plan for lack of good faith under Section 1325(a).”); New Jersey Lawyers’ Fund for Client Protection v. Goddard (In re Goddard), 212 B.R. 233, 237–38 (D.N.J. 1997) (Bankruptcy court erred in failing to consider disbarred attorney’s prepetition misconduct on motion to dismiss case for bad faith. “The Third Circuit has indicated that lack of good faith in filing the petition is sufficient cause for dismissal under Chapter 13.” In a footnote, “the party moving for dismissal” has the burden of proof to demonstrate cause. Citing In re Lilley, 91 F.3d 491 (3d Cir. 1996), “the record contains no findings regarding whether the Chapter 13 petition was filed in good faith. In particular, there are no findings regarding the nature of the debt, the timing of the petition, how the debt arose, the debtor’s motive in filing the petition, how the debtor’s actions affected creditors, the debtor’s treatment of creditors both before and after the petition was filed, and whether the debtor has been forthcoming with the bankruptcy court and the creditors.” Again in a note, “[w]hile there ‘will often be substantial overlap’ in a good faith analysis of a Chapter 13 petition and a good faith analysis of a Chapter 13 plan, . . . the analysis is not identical.” On remand, bankruptcy court should consider that vast majority of debt arose from dishonest conduct as an attorney and the immediate reason for filing the Chapter 13 petition was to deal with an arrest warrant issued because of debtor’s problems with “Client Security Fund.” Court observed that statements and schedules were inaccurate in that the debtor claimed responsibility for a greater portion of the family living expenses than appropriate and under the proposed plan only the IRS would receive payment.); In re Fleury, 294 B.R. 1 (Bankr. D. Mass. 2003) (“In determining a debtor’s lack of good faith in filing a Chapter 13 petition under the totality of circumstances test, bankruptcy courts consider: (1) whether a debtor misrepresented facts in her petition, unfairly manipulated the Bankruptcy Code, or otherwise filed a Chapter 13 petition in an inequitable manner; (2) the debtor’s history of filings and dismissals; (3) whether the debtor only intended to defeat state court litigation; and (4) whether egregious behavior is present.”); In re Soost, 290 B.R. 116, 133 (Bankr. D. Minn. 2003) (“Filing a Chapter 13 petition in bad faith is ‘cause’ for dismissal under 11 U.S.C. § 1307(c). . . . The Debtor’s lack of good faith in filing for relief under Chapter 13 is manifested by all of the same facts that compelled the finding under § 1325(a)(3).”); In re Fretwell, 281 B.R. 745, 749 (Bankr. M.D. Fla. 2002) (“[L]ack of good faith in filing a bankruptcy petition constitutes cause for dismissal under § 1307(c). . . . [A] motion to dismiss for lack of good faith is measured by the same standard for determining good faith at confirmation.”); In re Virden, 279 B.R. 401, 407 (Bankr. D. Mass. 2002) (“The same standard for finding good, or bad, faith may properly be used [under §§ 1307(c) and 1325(a)(3)], the only distinction being who bears the burden of proof.”); In re Larson, 245 B.R. 609, 617 (Bankr. D. Minn. 2000) (The same bad faith that justified denial of confirmation also justifies dismissal. Confirmation was denied on several grounds, including that the debtor conveyed real property prior to the petition with actual intent to hinder, delay or defraud creditors and incurred debts when the debtor had no ability to repay. “Numerous courts have held that filing a Chapter 13 petition in bad faith is cause for dismissal under § 1307(c). . . . The difference between good faith in proposing a plan and good faith in filing a case is nominal. . . . Indeed, the Eighth Circuit has articulated the same standard for finding bad faith in both instances. . . . Based upon all the factors that led me to conclude that the Debtor did not propose his plan in good faith, I also conclude that the Debtor did not file his Chapter 13 petition in good faith. Accordingly, I will dismiss the Debtor’s Chapter 13 case for cause pursuant to 11 U.S.C. § 1307(c).”); In re Buchanan, 225 B.R. 672 (Bankr. D. Minn. 1998) (Bad faith is a ground for dismissal of a Chapter 13 case under § 1307(c), and bad faith is shown by applying the totality-of-the-circumstances test emphasizing six factors—accuracy, honesty, whether the Code is being unfairly manipulated, the type of debt sought to be discharged, whether debt would be nondischargeable in a Chapter 7 case and the debtor’s motivation and sincerity in seeking Chapter 13 relief. Dismissal is warranted because the debtor failed to disclose trade names, the debtor characterized his ownership interest in businesses in a deliberately misleading manner, the debtor did not list his creditors accurately, did not list his ownership interest in a family partnership and other assets, failed to disclose his ownership of a boat, inaccurately reported his income, valued his business interests inaccurately and made transfer to family members before bankruptcy in an effort to defeat collection by the IRS.); In re Griffith, 203 B.R. 422, 424–25 (Bankr. N.D. Ohio 1996) (Bad faith constituting cause for dismissal that debtor filed Chapter 13 case to avoid sale of farm ordered by state domestic relations court. “‘[L]ack of good faith is a valid basis of decision in a “for cause” dismissal by a bankruptcy court.’ . . . The policy behind good faith is the same regardless of whether the issue is raised under Section 1307(c) or 1325(a). . . . Therefore, similar analysis can be used to determine good faith under both sections. . . . [B]ankruptcy court authority should not be exercised when it is clear that the bankruptcy action is merely a continuation of a previously litigated dispute between divorced spouses.”).

 

23  See § 217.1 [ Burden of Proof ] § 115.3  Burden of Proof.

 

24  See § 332.1 [ Procedure, Timing and Form ] § 152.1  Procedure, Timing and Form. See, e.g., In re Edwards, No. 03-10018, 2003 WL 22016324 (Bankr. D. Vt. Aug. 26, 2003) (unpublished) (“The potential for blurring the line between the concepts of bad faith and a lack of good faith is significant, since both concepts play an important role in chapter 13 cases. However, it is critical to keep these two concepts distinct because they arise in different aspects of a case and the burden of proof differs depending on which concept is at issue.”); In re Lancaster, 280 B.R. 468, 474 (Bankr. W.D. Mo. 2002) (“The difference between good faith in filing a case and good faith in proposing a plan is relatively minor, and the evidence on both issues may properly be considered together. . . . Perhaps the only real distinction between the two is in the burden of proof. Under § 1307(c), the objecting creditor bears the burden of proof.”); In re Virden, 279 B.R. 401, 407–11 (Bankr. D. Mass. 2002) (“The same standard for finding good, or bad, faith may properly be used [under §§ 1307(c) and 1325(a)(3)], the only distinction being who bears the burden of proof. . . . Under Section 1307(c), the objecting creditor bears the burden of proof.”).

 

25  See cases collected in Appendix O.

 

26  See cases collected in Appendix O.

 

27  See cases collected in Appendix O. See also § 24.1  Court-Imposed Restrictions on Eligibility to Refile and § 153.3  Court-Imposed Conditions and Restrictions on Dismissal for discussion of court-imposed conditions and restrictions on dismissal.

 

28  501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991).

 

29  See also §§ 146.1 [ Debts Discharged in Prior Bankruptcy and Nonrecourse Debts ] § 85.5  Debts Discharged in Prior Bankruptcy and Nonrecourse Debts and 305.1 [ Nonrecourse Claims and Claims Discharged in Prior Bankruptcy Case ] § 138.4  Nonrecourse Claims and Claims Discharged in Prior Bankruptcy Case.

 

30  See discussion beginning at § 25.1  180-Day Bar to Eligibility in 11 U.S.C. § 109(g)—In General.

 

31  964 F.2d 588 (6th Cir. 1992).

 

32  964 F.2d at 591.

 

33  See In re Earl, 140 B.R. 728, 736–38 (Bankr. N.D. Ind. 1992) (After Johnson v. Home State Bank, 501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991), the importance of repetitive filings as an indicator of lack of good faith is reduced; however, “a problem different from that posed by ‘Chapter 20’ cases occurs . . . when a debtor files successive Chapter 13 cases. . . . [A] bona fide change in circumstances may justify that a successive filing was proper.” Here the debtor has shown no bona fide change in circumstances. Debtor is enjoined from refiling for six months.); In re Hornlein, 130 B.R. 600, 602–03 (Bankr. M.D. Fla. 1991) (After Supreme Court’s decision in Johnson v. Home State Bank, 501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991), it is clear that debtor who received a discharge in a recent Chapter 7 case and who is no longer personally liable may still seek relief under Chapter 13 “provided there is nothing in the record to indicate that the debtor acted in bad faith. . . . Based on the facts of this case, this court is satisfied that it is appropriate to give this debtor an opportunity to save her home provided she immediately cure all pre- and post-petition defaults. . . . Considering the fact that now the debtor is a sole petitioner, that her husband is no longer involved, that she is in control of her funds and claims that she is able to cure the defaults, this court is satisfied that it is appropriate to permit her to seek confirmation of her Chapter 13 plan in order to save her home.”); In re Barker, 129 B.R. 287 (Bankr. M.D. Fla. 1991) (Citing Johnson v. Home State Bank, 501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991), debtor’s fourth Chapter 13 case in 12 months was not prohibited by § 109(g) because, though filed within 180 days of debtor’s voluntary dismissal of third case, third case was not dismissed for willful failure of debtor to abide by court orders, nor was third case voluntarily dismissed following the filing of a request for relief from the stay. Neither debtor nor debtor’s counsel was subject to sanctions under Rule 9011 or any other provision of the Code or Rules for the fourth permitted filing.).

 

34  28 F.3d 34 (7th Cir. 1994).

 

35  28 F.3d at 35.

 

36  See, e.g., Pagnac v. Minnesota Dep’t of Revenue (In re Pagnac), 228 B.R. 219 (B.A.P. 8th Cir. 1998) (Cause for dismissal that confirmed plan was “an impossibility” once the court correctly determined that the three-year lookback for the priority of taxes was tolled during the debtor’s prior Chapter 12 case. Confirmed plan providing for payment in full of priority claims funded with $100 per month is not sufficient to pay a priority claim for state income taxes of $16,634.81.); In re King, 217 B.R. 623 (Bankr. S.D. Cal. 1998) (Cause for dismissal that after completion of payments in a 55-month plan IRS filed a large allowed claim for postpetition taxes that the debtor could not pay in full as a priority claim within the 60-month time limit.).

 

37  See discussion beginning at § 73.1  Plan Must Provide Full Payment and § 136.1  Treatment of Priority Claims.

 

38  See discussion of the res judicata and binding effects of confirmation under § 1327(a) in § 229.1 [ 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors ] § 120.2  11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors.

 

39  See In re Puckett, 193 B.R. 842 (Bankr. N.D. Ill. 1996) (Distinguishing In re Escobedo, 28 F.3d 34 (7th Cir. 1994), IRS not entitled to reopen Chapter 13 case to vacate order of confirmation when schedules listed IRS with a debt of zero, plan provided that unsecured claim holders that failed to file timely proofs of claim would be paid nothing, IRS did not object to confirmation and did not timely file a proof of claim, debtor completed payments, an order of discharge was entered and the case was closed.).

 

40  In re Harvey, 213 F.3d 318, 319–323 (7th Cir. 2000) (Confirmation of plan that lien-stripped undersecured car lender precludes objection to same provision in modified plan notwithstanding some ambiguity at confirmation of the original plan. Proposed plan treated GMAC as an undersecured creditor. “Long form” of the plan stated, “Upon payment of the allowed secured claim as indicated, any lien held by GMAC on said vehicle shall be void and title to said vehicle shall be released to debtor.” Debtor also filed a single-page “short form plan” that did not mention cancellation of GMAC’s lien. Plan was confirmed without objection on November 27, 1996. On January 15, 1998, debtor moved to modify the plan. The proposed modified plan made no change in the treatment of GMAC’s lien. GMAC objected to the lien-stripping terms of the original plan, claiming that it never received part of the long-form plan. The Seventh Circuit reserved the question whether lien stripping over a creditor’s objection is permitted prior to the completion of payments under a Chapter 13 plan. “It is a well-established principle of bankruptcy law that a party with adequate notice of a bankruptcy proceeding cannot ordinarily attack a confirmed plan. 11 U.S.C. § 1327(a). . . . The reason for this . . . mirrors the general justification for res judicata principles . . . . This is especially true in the bankruptcy context, where a confirmed plan acts more or less like a court-approved contract or consent decree that binds both the debtor and all the creditors. . . . [T]here is a fundamental defect in GMAC’s case. GMAC failed to lodge a proper objection to the existence of the two plans before the bankruptcy court acted. . . . If GMAC was genuinely uncertain about the combined effect of the short and long forms (a total of four pages), it was obligated to raise this issue with the bankruptcy court prior to the original plan confirmation. . . . [I]t is perfectly reasonable to expect interested creditors to review the terms of a proposed plan and object if the terms are unacceptable, vague, or ambiguous. . . . In re Pence, 905 F.2d 1107, 1109 (7th Cir. 1990) . . . [Andersen v. UNIPAC-NEBHELP (In re Andersen),] 179 F.3d 1253, 1257 (10th Cir. 1999) . . . In re Szostek, 886 F.2d 1405, 1414 (3d Cir. 1989) . . . . Nor is this a situation like that presented in In re Escobedo, 28 F.3d 34 (7th Cir. 1994). As the Escobedo court made clear, its refusal to apply res judicata principles in that case resulted from the fact that the debtor’s original plan failed to comply with the mandatory provisions of 11 U.S.C. § 1322(a)(2). The modification of a secured creditors’s rights—the issue here—is allowed but not required under sec. 1322(b). . . . We do not mean to suggest that a party may never claim in a subsequent proceeding that a provision of a Chapter 13 plan is ambiguous and should be read one way or another. . . . [T]he ambiguity about which GMAC was complaining was one that was readily identifiable during the original confirmation proceedings. . . . [W]e hold that if GMAC had doubts as to what plan was being confirmed in the 1996 proceedings, it should have alerted the bankruptcy court to the ambiguity at that time, not 16 months later.”).