§ 22.1 — Eligibility of a Simultaneous Filer

Revised: March 6, 2009

[ This section has been revised and will be updated in July 2018. ]

[1]

The Bankruptcy Code does not specifically prohibit the filing of a Chapter 13 case by an individual who is also a debtor in a pending bankruptcy case. But a respectable number of courts have held that an individual is ineligible to be a Chapter 13 debtor if another bankruptcy case is pending for the same debtor.1 The U.S. Court of Appeals for the Seventh Circuit Court has recently overstated that the “majority rule” is a per se bar to the debtor’s “having more than one bankruptcy case open at any time.”2 More accurately, an almost equal number of reported decisions hold there is no per se bar to filing a Chapter 13 case while a Chapter 7 case or another Chapter 13 case is pending for the same debtor.3 A per se rule overstates the reality: courts often look at whether the two cases deal with the same assets and/or debts.4

[2]

Filing Chapter 13 during administration of another bankruptcy case, even if not per se prohibited, has been considered by several courts to be strongly indicative of bad faith for purposes of dismissal under 11 U.S.C. § 13075 and for purposes of the good-faith condition for confirmation in 11 U.S.C. § 1325(a)(3).6

[3]

Several courts have cited the Supreme Court’s 1925 decision in Freshman v. Atkins7 for the “single estate rule”—that an individual cannot be a debtor in more than one pending bankruptcy case because property of the estate cannot be subject to administration in concurrent cases.8 The Bankruptcy Appellate Panel for the Second Circuit overstated that

there is universal agreement . . . that where a debtor files for chapter 7 relief and then files for protection under chapter 13 before receiving a discharge in the original chapter 7 case, that the chapter 13 case is a nullity because the simultaneous petitions is [sic] “contrary to the obvious contemplated function of the Bankruptcy Code to resolve a debtor’s financial affairs by administration of a debtor’s property as a single estate under a single chapter within the code.”9
[4]

In Transamerica Credit Corp. v. Bullock (In re Bullock),10 the Bankruptcy Court for the Eastern District of Virginia offered this less expansive reading of Freshman:

Several courts operating under the present Code have cited [Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925),] as holding that two cases brought by the same debtor cannot be open at the same time. . . . [T]hese decisions overstate the sweep of the Supreme Court’s ruling. . . .  At most, Atkins could be interpreted as stating that two cases which seek to discharge the same debt cannot be pending simultaneously, a principle which this case does not violate.11
[5]

Stated in terms of assets rather than debts, a bankruptcy court in Florida adopted the following “milder and more reasonable formulation” of the single estate rule:

Although some cases read [Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925),] as barring all simultaneous cases . . . Freshman does not compel this result. . . . [T]he Eleventh Circuit’s holding in [Jim Walter Homes, Inc. v. Saylors (In re Saylors), 869 F.2d 1434 (11th Cir. 1989),] that a second case can be filed before the first case is closed, is tantamount to a rejection of the strong version of the single estate rule. . . . A milder and more reasonable formulation of the single estate rule simply bars a particular piece of property from being an asset of multiple bankruptcy estates simultaneously. . . . [S]uch a rule does not conflict with the Eleventh Circuit’s ruling in Saylors, is consistent with the Supreme Court decision in Freshman v. Atkins, and makes practical sense. . . . [D]uring the course of a chapter 13 case, property not administered in or necessary for payments in the case revests in the debtor and is not part of the bankruptcy estate. A debtor is therefore capable of creating a distinct second estate, which contains no assets in common with the first. . . . In light of the potential for non-abusive second filings, a per se rule always barring a second chapter 13 filing before discharge in the first case, simply to avoid the possibility of abuse, would conflict with Congress’ purpose of encouraging chapter 13 plans.12

This Florida court recognized that there are many conflicting views of “property of the estate”—especially after confirmation in a Chapter 13 case13—that can dramatically affect the calculus whether simultaneous cases involve administration of the same assets.

[6]

A debtor in more than one pending bankruptcy case may be forced to elect to continue one or the other.14 Bankruptcy Rule 1015 provides that the bankruptcy court “may order consolidation of the cases” when “two or more petitions are pending in the same court by or against the same debtor.”15 Taking this Rule a step further, in In re Teal,16 the Bankruptcy Court for the Southern District of Georgia—the court in which the debtor’s Chapter 7 case was pending—ordered the transfer of a simultaneously pending Chapter 13 case from the Southern District of Florida. One court observed that when a Chapter 7 debtor files a Chapter 13 case before the Chapter 7 case is closed, it is appropriate for the bankruptcy court “to consider whether the cases should be consolidated . . . and whether the case should proceed under Chapter 7 or Chapter 13.”17 When the filing of the second case is a delaying tactic intended only to avoid adverse events in the first of the pending cases, courts have dealt harshly with the debtor, granting sanctions and enjoining the debtor from proceeding in the second case.18

[7]

The timing of the filing of a Chapter 13 case during the administration of a Chapter 7 case may make a difference whether the debtor is eligible.19 If closing the Chapter 7 case has simply been delayed without fault of the debtor, a simultaneous Chapter 13 case can be justified to deal with secured claims that survived Chapter 7 discharge.20 When the second filing benefits the debtor to the prejudice of creditors, the scale tips against the debtor.21 Discussed in more detail elsewhere,22 debts discharged in a Chapter 7 case, although not necessarily contingent or unliquidated, are not counted for eligibility under § 109(e) in a subsequent Chapter 13 case because discharge of the debtor’s personal liability eliminates the creditor’s right to payment, and thus there is no debt. Exceptions to this general rule include liens that survived discharge23 and nondischargeable claims. Filing a Chapter 13 case while a Chapter 7 case is pending, but after entry of discharge, could dramatically change the eligibility calculus by eliminating all the dischargeable debt.24 If the Chapter 13 case is filed before discharge in the Chapter 7 case, it is likely that all noncontingent and liquidated debts scheduled in the Chapter 7 case will be counted toward the § 109(e) debt limitations in the Chapter 13 case. One court has held that when a Chapter 13 case is filed while a Chapter 7 case is pending and before the trial of dischargeability litigation in the Chapter 7 case, the debt limitations for eligibility purposes are counted as if the plaintiff’s claims are not discharged.25 On extreme facts, one bankruptcy court consolidated a prior Chapter 7 case with a Chapter 13 case filed after discharge but before closing of the Chapter 7 case to entitle the (discharged) creditors to share in the value of property in the Chapter 13 estate.26

[8]

Applying Atkins, the bankruptcy court in Teal found that the filing of a Chapter 13 case before discharge and while dischargeability litigation was pending in a prior Chapter 7 case violated the principle that a debtor cannot discharge the same debt in simultaneous bankruptcy cases. Teal read Freshman to prohibit the second case until after discharge in the first case or at least to require that the second case must deal with different debts. Also citing Freshman, in In re Burnett,27 the bankruptcy court permitted a second Chapter 13 case after the completion of payments but before entry of discharge in a pending Chapter 13 case. The Burnett court explained that when discharge in the first case is “imminent,” the rule that a debtor is not eligible to seek discharge of the same debts in simultaneously pending cases “serves no real purpose.”28 In In re Strohscher,29 the bankruptcy court found no per se prohibition against simultaneously pending Chapter 7 and Chapter 13 cases but observed, “[I]t is difficult . . . to conceive of any legitimate reason as to why a debtor would, prior to receiving a discharge, need to file a subsequent bankruptcy case.”30 The Strohscher court stated that the second case must be filed after discharge in the first case absent “exceptional and unique circumstances which would necessitate the granting of extraordinary relief.”31 The bankruptcy court in In re Lord32 held that waiting until after discharge in a Chapter 7 case to file a Chapter 13 case would not rescue the second case from the “majority rule” that an individual debtor can maintain only one bankruptcy case at a time.

[9]

Perhaps the rule (if any) to devine from these cases is that filing the second case after discharge in the first case better positions the debtor to argue for eligibility, but timing is no guarantee of eligibility in the simultaneously pending second case.

[10]

Conversion of an existing Chapter 7 case to Chapter 13 after discharge in the Chapter 7 case presents an entirely different dynamic.33 Some courts have suggested or required that debtors surrender the discharge as a condition to proceeding in Chapter 13. For example, the debtors in In re Starling34 had received a Chapter 7 discharge and had acted in good faith throughout the Chapter 7 administration, when to their surprise, the Chapter 7 trustee’s appraisal of their home revealed substantial equity beyond exemptions. The debtors wished to convert to Chapter 13 to save their home. The court granted conversion conditioned that the Chapter 7 discharge be vacated, reasoning that otherwise, there would be no personal liability to address in the Chapter 13 case. The court recognized that vacating discharge was an equitable remedy not found in the Code or Rules.35

[11]

The filing of a Chapter 13 case while another bankruptcy case is pending for the same debtor is risky. If eligibility is challenged, it is likely that the court will strictly scrutinize the debtor’s eligibility.36 If the debtor survives an eligibility challenge, there will be enhanced vitality to the good-faith challenge to confirmation,37 or good faith will be vigorously argued as cause for dismissal or for relief from the stay.38 If circumstances permit, it is much the stronger position for the debtor to wait until the prior bankruptcy case is closed before commencing a Chapter 13 case.

[12]

Chapter 7 debtors are sometimes inspired to precipitously file Chapter 13 when relief from the stay has been granted to a secured creditor or a creditor has refused to reaffirm a debt secured by something the debtor wants to keep. The creditor’s strategy is clear—a secured claim holder that has refused reaffirmation should move for relief from the stay. Once granted relief from the stay in the pending Chapter 7 case, the creditor should act quickly to foreclose upon its collateral before administration of the pending case is complete. To interrupt foreclosure, the debtor will have to chance filing a new bankruptcy case during the pending case or find some way to dismiss the pending case that avoids the 180-day bar to refiling in § 109(g).39

[13]

The creditor challenging a Chapter 13 filing during another bankruptcy case should attack eligibility, request relief from the stay and move for dismissal for cause. The refiling should be asserted as bad faith for dismissal and confirmation purposes. That the Chapter 13 case was filed after relief from the stay in a pending Chapter 7 case is cited by courts as an abuse that justifies relief from the stay or dismissal of the Chapter 13 case.40

[14]

The strategic filing of a second (or more) case after stay relief has been granted in a prior case may be affected by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).41 Detailed elsewhere,42 BAPCPA added § 362(c)(3) and (4), which terminate portions of the automatic stay 30 days after the petition or prevent the stay from coming into effect altogether when one or more prior bankruptcy cases were pending and dismissed within a year of the current petition. These new subsections seem to address multiple or serial filings when the prior case(s) were both pending and dismissed within a year of the current petition.43 Arguably, simultaneously pending cases—the prior case is pending but not dismissed—would not trigger the new stay limitations in § 362(c)(3) and (4). This raises the strategic consideration whether a debtor who has lost the stay in a pending case should file a new case before dismissal of the pending case to avoid § 362(c)(3) and (4). If the above discussion of simultaneous cases proves anything, it is that dodging § 362(c)(3) and (4) by quickly filing a simultaneously pending case may avoid one new problem by creating a whole host of old problems.


 

1  In re Sidebottom, 430 F.3d 893, 897 (7th Cir. 2005) (adopting per se rule against simultaneous cases); Turner v. Citizens Nat’l Bank (In re Turner), 207 B.R. 373, 378–79 (B.A.P. 2d Cir. 1997) (In the context of a motion for stay pending appeal of a bankruptcy court order granting relief from the stay, debtors have not demonstrated “substantial possibility” of success on appeal, because Chapter 13 case was filed while a prior Chapter 7 case was pending and before discharge in the Chapter 7 case. “There is a decided difference of opinion over whether a debtor may ever simultaneously maintain two separate bankruptcy proceedings. . . . [T]he Turners’ chapter 13 case is likely null and void from its inception and subject to dismissal for cause under section 1307(c).”); Westphal v. Robinson (In re Robinson), No. 06-C-0316, 2007 WL 2751864 (E.D. Wis. Sept. 18, 2007) (unpublished) (relying on Sidebottom); In re Barnes, 231 B.R. 482 (E.D.N.Y. 1999) (Following “majority rule” adopted by BAP in Turner v. Citizens Nat’l Bank (In re Turner), 207 B.R. 373 (B.A.P. 2d Cir. 1997), affirms dismissal of Chapter 13 case filed while prior Chapter 7 case was pending and while creditor was attempting to complete foreclosure on debtor’s real property.); In re Wilson, 390 B.R. 899 (Bankr. N.D. Ind. 2008) (appying Sidebottom); In re Brandford, 386 B.R. 742 (Bankr. N.D. Ind. 2008) (applying Sidebottom); In re Pingleton, No. 03-71986, 2003 WL 21976028, at *1–*2 (Bankr. C.D. Ill. Aug. 18, 2003) (unpublished) (“Simultaneous Chapter 20” is prohibited even when Chapter 7 case remains open only because trustee is attempting to avoid a security interest. “The majority rule is that a Chapter 13 petition filed by debtors while their Chapter 7 case is still open should be dismissed. . . . This Court agrees.”); In re Lord, 295 B.R. 16, 18 (Bankr. E.D.N.Y. 2003) (Adopting “majority rule” from Turner v. Citizens Nat’l Bank (In re Turner), 207 B.R. 373 (B.A.P. 2d Cir. 1997), debtor cannot maintain a Chapter 13 case while prior Chapter 7 case is still being administered. “Neither Bankruptcy Rule 1015, nor any provision of the Bankruptcy Code addresses the propriety of simultaneous cases under different Chapters with regard to the same debtor . . . . The majority of courts . . . have ruled that only one bankruptcy case may be pending at a time and for a given debtor.”); In re McDaniels, 213 B.R. 197, 199 (Bankr. M.D. Ga. 1997) (In dicta, on a motion to dismiss for failure to make payments, “[i]f Debtors were to file another case while the current case is pending, it is likely that the new case could be promptly dismissed under the ‘prior pending’ rule.”); Clifton Sav. Bank v. Jackson (In re Jackson), 184 B.R. 16, 21 (D.N.J. 1995) (Because the debtors have a pending Chapter 11 case, the debtors’ newly filed Chapter 13 case must be dismissed. Debtors filed a Chapter 11 case to manage a mortgage and engineered the dismissal of the Chapter 11 case five days after the enactment of new § 1322(c) in 1994. The debtors immediately refiled to take advantage of the 1994 amendments. On appeal, the district court found that the debtors had actually converted the Chapter 11 case to Chapter 13 and thus the immediate refiling resulted in simultaneously pending cases. “[B]ecause we find that the Chapter 11 case was actually converted to a Chapter 13 proceeding, we must dismiss [the new Chapter 13 filing]. ‘If a bankruptcy action is pending, a bankruptcy action which purports to affect the same debt cannot be maintained.’”); In re Pickering, 195 B.R. 759, 765–66 (Bankr. D. Mont. 1996) (Rejecting In re Grimes, 117 B.R. 531 (B.A.P. 9th Cir. 1990), debtor cannot maintain a Chapter 13 case while a prior Chapter 7 case is pending, even after discharge in the Chapter 7 case. “In Grimes, the BAP held that no statutory bar existed to filing a Chapter 13 case while a Chapter 7 case was pending but after discharge had been entered because at that point the ‘single estate rule’ no longer applied. . . . This Court and others, however, has [sic] sharply criticized the ‘single estate’ distinction made in Grimes as artificial. . . . The efficient administration of bankruptcy estates under the Bankruptcy Code requires that only [sic] a debtor have only one case open at a time. This Court therefore declines to follow the BAP’s Grimes decision into what it views as an incorrect statement of law and instead adopts the majority rule based upon [Freshman v. Atkins, 269 U.S. 121, 46 U.S. 41, 70 L. Ed. 193 (1925)] . . . under which ‘a debtor cannot filed [sic] a second bankruptcy petition while a previous petition is pending.’”); In re Fulks, 93 B.R. 274, 275 (Bankr. M.D. Fla. 1988) (“A debtor may not simultaneously maintain a Chapter 7 case and a Chapter 13 case prior to the Chapter 7 discharge.”); In re Heywood, 39 B.R. 910 (Bankr. W.D.N.Y. 1984); Associates Fin. Servs. Corp. v. Cowen, 29 B.R. 888 (Bankr. S.D. Ohio 1983).

 

2  In re Sidebottom, 430 F.3d 893, 897 (7th Cir. 2005) (Debtor with Chapter 7 petition pending listing same debts is not eligible for simultaneous Chapter 13 relief. Johnson v. Home State Bank, 501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991), was “sequential Chapter 20,” in contrast to simultaneous Chapter 20.).

 

3  See Jim Walter Homes, Inc. v. Saylors (In re Saylors), 869 F.2d 1434 (11th Cir. 1989) (Debtor is not prohibited from filing a Chapter 13 petition before the Chapter 7 trustee files a final report in the debtor’s Chapter 7 case.); Davis v. Mather (In re Davis), 239 B.R. 573, 575 n.2 (B.A.P. 10th Cir. 1999) (“We note that the Debtor filed his Chapter 13 petition after he received his Chapter 7 discharge but before the Chapter 7 proceedings were closed. A debtor who has been granted a discharge under one chapter under Title 11 may file a subsequent petition under another chapter even though the first case remains open, as long as the debtor meets the requirements for filing the second petition.”); In re Burnett, No. 02-84004, 2002 WL 32001418, at *1 (Bankr. C.D. Cal. Nov. 19, 2002) (unpublished) (Simultaneous Chapter 13 cases are permitted when debtor has completed payments in the first case. Debtor made final payment under confirmed plan in July 2002, then filed second Chapter 13 case on September 4, 2002. Discharge order in first case was “slow to issue.” “Most courts now agree that there is no per se rule that prohibits multiple bankruptcy filings, and that the real issue, most of the time, is whether the second case was filed in good faith.”); In re Strohscher, 278 B.R. 432, 433–34 (Bankr. N.D. Ohio 2002) (There is no per se prohibition against simultaneously pending Chapter 7 and Chapter 13 cases, but the second filing is subject to strict scrutiny. “[N]owhere . . . in the Bankruptcy Code is it set forth that a debtor is prohibited from maintaining two simultaneous bankruptcy cases. . . . Bankruptcy Rule 1015 . . . contemplates that a debtor may maintain, at the same time, multiple bankruptcy cases.”); In re Taylor, 261 B.R. 877 (Bankr. E.D. Va. 2001) (Citing Johnson v. Home State Bank, 501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991), debtor is not categorically forbidden to file Chapter 13 seven days after a Chapter 7 discharge and while her Chapter 7 case is still pending.); In re Covino, 245 B.R. 162, 168 (Bankr. D. Idaho 2000) (Filing a Chapter 13 case after revocation of discharge but before closing or dismissal of a prior Chapter 7 case is not per se prohibited. “Courts, including this one, have generally agreed with Debtors’ assertion that there is no absolute prohibition against the filing of a Chapter 13 petition while another bankruptcy case remains pending.”); In re Cowan, 235 B.R. 912 (Bankr. W.D. Mo. 1999) (Filing a Chapter 13 case after discharge, but before closing of a prior Chapter 7 case is not per se impermissible but is one factor in good faith analysis on a creditor’s motion to dismiss the Chapter 13 case. Not bad faith that debtor filed Chapter 13 case before closing of Chapter 7 case to keep possession of a car with respect to which the Chapter 7 trustee avoided an unperfected lien.); In re Whitmore, 225 B.R. 199, 202 (Bankr. D. Idaho 1998) (That second Chapter 13 case was pending for six days after debtors voluntarily dismissed prior Chapter 13 case but before an order dismissing prior case was entered did not require dismissal of second case. “Debtors are not statutorily prohibited from filing a petition for relief while another case is pending. . . . [T]he ‘single estate rule,’ which recognizes that the property of the estate cannot be subject to administration separately under two concurrent cases, may prevent two cases from proceeding at the same time. . . . [F]or six days both chapter 13 cases were pending; after that time, the first case was dismissed and only the second remained. Property of the estate was and is now being administered solely in the second case. Under all the circumstances . . . the fact that the two cases here were simultaneously pending for a few days does not warrant dismissing the second case.”); Transamerica Credit Corp. v. Bullock (In re Bullock), 206 B.R. 389, 392–93 (Bankr. E.D. Va. 1997) (On a creditor’s motion for relief from the stay, debtor is eligible for Chapter 13 while prior Chapter 7 case is pending and before entry of discharge in the Chapter 7 case. “[I]f the equities of a case so dictate and if a second filing will not materially hinder the efficient administration of the debtor’s estate, the court may recognize the viability of the second case. . . . [E]xtreme circumstances must warrant the second filing.”); In re Aichler, 182 B.R. 19, 21 (Bankr. S.D. Tex. 1995) (“As a general rule, a debtor may not have two bankruptcy cases pending simultaneously. . . . However, even when a discharge has been entered in a Chapter 7 proceeding, a debtor is not barred as a matter of law from filing a Chapter 13 proceeding.”); In re Hodurski, 156 B.R. 353, 354–56 (Bankr. D. Mass. 1993) (The filing of a Chapter 13 case while a Chapter 7 case is still pending and before entry of discharge in the Chapter 7 case is not per se prohibited by the Bankruptcy Code or Rules, but dismissal is appropriate because the debtor’s Chapter 13 plan is not feasible and no reorganization is in prospect. “Since the 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 has become increasingly common for debtors who have been in [a] Chapter 7 case to seek Chapter 13 protection as a means of dealing with mortgage liens or nondischargeable claims that survive the Chapter 7 discharge. . . . [T]he Supreme Court did not address whether a debtor may maintain a Chapter 13 case during the pendency of a Chapter 7 case. . . . There is no express prohibition in the Bankruptcy Code or the Federal Rules of Bankruptcy Procedure barring a Chapter 7 debtor from simultaneously seeking Chapter 13 relief. . . . Although the commencement of a Chapter 13 case during the pendency of the Chapter 7 case may be indicative of bad faith, the Court shall determine this issue in the context of objections to confirmation of the Chapter 13 plan or at some other appropriate time, such as the hearing on the motion for relief from stay when the likelihood of a successful reorganization is at issue.”); In re Cormier, 147 B.R. 285 (Bankr. D. Me. 1992) (Filing a Chapter 13 petition while a prior Chapter 13 case remains pending is not per se forbidden but is an indication of bad faith.); In re Fountain, 142 B.R. 135 (Bankr. E.D. Va. 1992) (Although there is no express language in the Bankruptcy Code that prohibits the filing of a second petition while a prior Chapter 13 case remains active, the court finds the second plan was filed in bad faith.); In re Farrington, 129 B.R. 271 (Bankr. M.D. Fla. 1991) (The filing of a Chapter 13 case after discharge but before closing of a prior Chapter 7 case is not per se prohibited but is indicative of bad faith.); In re Samarrippas, 107 B.R. 366 (Bankr. M.D. Fla. 1989) (Departing from Fulks, the court finds that there is no absolute prohibition against simultaneous Chapter 7 and Chapter 13 cases.); In re Kosenka, 104 B.R. 40 (Bankr. N.D. Ind. 1989) (Simultaneous Chapter 13 and Chapter 7 cases are not per se prohibited if the discharge has been entered in the Chapter 7 case. Chapter 13 petition is prohibited before discharge in the Chapter 7 case.); Helbock v. Strause (In re Strause), 97 B.R. 22 (Bankr. S.D. Cal. 1989) (Debtor discharged in a Chapter 7 case is not prohibited from filing a Chapter 13 case although the Chapter 7 remains open.); Ghosh v. Financial Fed. Sav. & Loan Ass’n, 38 B.R. 600 (Bankr. E.D.N.Y. 1984) (Debtor is not barred from filing Chapter 13 petition during pendency of Chapter 7 case.); In re Bumpass, 28 B.R. 597 (Bankr. S.D.N.Y. 1983).

 

4  See below in this section. See, e.g., In re Brandford, 386 B.R. 742 (Bankr. N.D. Ind. 2008) (Klingeberger) (Cause for dismissal that prior Chapter 13 case is pending in which debtor has not received discharge; debtor may not subject same debts to discharge in two cases.).

 

5  See §§ 333.1 [ Cause for Dismissal—In General ] § 152.2  Cause for Dismissal—In General and 334.1 [ Cause for Dismissal, Including Bad-Faith, Multiple and Abusive Filings ] § 152.4  Cause for Dismissal, Including Bad-Faith, Multiple and Abusive Filings. See, e.g., In re Cole, No. 07-41602-659, 2007 WL 2908195 (Bankr. E.D. Mo. Sept. 12, 2007) (unpublished) (Distinguishing cases that prohibit simultaneous filings, second case is dismissed for bad faith when debtor caused delay in payment to creditors in pending Chapter 7 case and proposed Chapter 13 plan will further delay payment.); In re Burnett, No. 02-84004, 2002 WL 32001418, at *1 (Bankr. C.D. Cal. Nov. 19, 2002) (unpublished) (“Most courts now agree that there is no per se rule that prohibits multiple bankruptcy filings, and that the real issue, most of the time, is whether the second case was filed in good faith.”); In re Covino, 245 B.R. 162, 168 (Bankr. D. Idaho 2000) (Filing a Chapter 13 case after revocation of discharge but before closing or dismissal of a prior Chapter 7 case is not per se prohibited, but it is evidence in support of dismissal with prejudice of the Chapter 13 case. “Filing a second case before the first is concluded, while perhaps evidence of bad faith, is not so per se. . . . [T]he Court need not ignore, and should certainly be alert to, the results achieved by both filings in determining whether the debtors have acted in bad faith.”).

 

6  See § 179.1 [ Frequency of Filing Bankruptcy—Chapter 20 and Beyond ] § 104.2  Frequency of Filing Bankruptcy—Chapter 20 and Beyond. See, e.g., In re Taylor, 261 B.R. 877 (Bankr. E.D. Va. 2001) (Debtor is not categorically forbidden to file Chapter 13 seven days after a Chapter 7 discharge and while her Chapter 7 case is still pending, but Chapter 13 petition is measured against and fails a strict good-faith requirement.).

 

7  269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925).

 

8  See, e.g., In re Wilson, 390 B.R. 899 (Bankr. N.D. Ind. 2008) (Grant) (Applying In re Sidebottom, 430 F.3d 893 (7th Cir. 2005), debtor is ineligible simultaneous filer when Chapter 7 case is still pending for administration of assets after discharge and Chapter 13 case involves same debts; Chapter 13 would interfere with Chapter 7 administration.); In re Shankman, 382 B.R. 591, 595 (Bankr. E.D.N.Y. 2008) (Craig) (Debtor may not maintain Chapter 7 and Chapter 13 cases simultaneously; although no statutory provision prohibits simultaneous cases, Chapter 13 case may not be filed to obtain control of asset which is being administered in Chapter 7. “[I]f an asset is property of the estate in a Chapter 7 case, it is not property of the debtor at the time of the filing of the subsequent Chapter 13 case, and therefore does not become property of the estate in the Chapter 13 case.” Chapter 13 case is dismissed, but debtor is permitted to convert prior Chapter 7 case to Chapter 13.); Baltrotsky v. KH Funding, Inc. (Baltrotsky), No. DKC2004-2643, 2004 WL 2937537, at *4 (D. Md. Dec. 20, 2004) (unpublished) (Applying “single estate rule,” filing of Chapter 13 case while prior Chapter 7 case was pending did not interrupt a foreclosure sale with respect to real property that remained in Chapter 7 estate and with respect to which relief from the stay had been granted in the Chapter 7 case. “As the bankruptcy court below held, ‘[t]he only assets which would be affected by the [Appellant’s] Chapter 13 filing would be assets he owned at that time.’ . . . In other words, the automatic stay created by the filing of the Chapter 13 petition would only be applicable to actions involving property included within the Chapter 13 estate. . . . This view comports with what has become known as the ‘single estate rule’ which holds that a debtor cannot maintain simultaneous bankruptcy cases because ‘[a] debtor possesses only one estate for purposes of trusteeship.’ . . . Under this rule, ‘“property cannot be an asset of both [two] estates simultaneously.”’ . . . Appellant’s Chapter 7 estate undoubtedly still existed at the time the Chapter 13 petition was filed. . . . [T]he Properties remained in the Chapter 7 estate throughout . . . . Therefore, the bankruptcy court did not err when it found that because the Properties were part of the Chapter 7 estate at the time Appellant filed his Chapter 13 petition, ‘there was no automatic stay with respect to the foreclosure on The Properties created by his Chapter 13 filing.’); In re Burnett, No. 02-84004, 2002 WL 32001418 (Bankr. C.D. Cal. Nov. 19, 2002) (unpublished) (Simultaneous Chapter 13 cases do not violate the “single estate rule” because confirmation in the first case vested all property of the estate in the debtor and once the debtor completed payments in the first case, the Chapter 13 estate is empty and the second filing does not violate the single estate rule.); In re Whitmore, 225 B.R. 199, 202 (Bankr. D. Idaho 1998) (“[T]he ‘single estate rule,’ which recognizes that the property of the estate cannot be subject to administration separately under two concurrent cases, may prevent two cases from proceeding at the same time.”); In re McDaniels, 213 B.R. 197 (Bankr. M.D. Ga. 1997) (In a footnote, the court cites Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925), for the proposition that an individual cannot simultaneously be a debtor in separate bankruptcy cases.); In re Pickering, 195 B.R. 759, 766 (Bankr. D. Mont. 1996) (Court adopts “the majority rule based upon [Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925)] . . . under which ‘a debtor cannot filed [sic] a second bankruptcy petition while a previous petition is pending.’”).

 

9  Turner v. Citizens Nat’l Bank (In re Turner), 207 B.R. 373, 378–79 (B.A.P. 2d Cir. 1997). Accord In re Barnes, 231 B.R. 482 (E.D.N.Y. 1999) (Applying Turner v. Citizens Nat’l Bank (In re Turner), 207 B.R. 373 (B.A.P. 2d Cir. 1997), “majority rule” bars filing of a Chapter 13 case while a prior Chapter 7 case is still open. Chapter 13 case was appropriately dismissed and debtor’s counsel sanctioned $500.).

 

10  206 B.R. 389 (Bankr. E.D. Va. 1997).

 

11  206 B.R. at 392–93. Accord In re Teal, 297 B.R. 922 (Bankr. S.D. Ga. 2003) (Citing Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925), filing Chapter 13 case when dischargeability litigation is pending in prior Chapter 7 case violates the principle that a debtor cannot attempt to discharge the same debt in two simultaneously pending bankruptcy cases. ); In re Burnett, No. 02-84004, 2002 WL 32001418, at *2 (Bankr. C.D. Cal. Nov. 19, 2002) (unpublished) (“[T]his Court agrees with those courts that interpret [Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925),] to stand for the proposition that two bankruptcy cases which seek to discharge the same debt cannot be pending simultaneously. . . . [W]here the discharge in the first case is imminent, the Atkins rule serves no real purpose.”); In re Strohscher, 278 B.R. 432, 434–36 (Bankr. N.D. Ohio 2002) (“[T]he Supreme Court in [Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925),] specifically permitted the debtor to discharge those debts listed in the second case that were not listed in the first bankruptcy case. . . . [T]he Supreme Court dismissed neither the debtor’s second petition nor his second application for discharge. . . . [T]he Atkins decision never held, on its facts, that a debtor could not maintain two simultaneous bankruptcy petitions. . . . [T]his Court declines to follow the single estate principle as it relates to the requirement that two simultaneous bankruptcy cases may only be pending for the sole reason that the debtor has received a discharge in the first bankruptcy case.”); In re Cowan, 235 B.R. 912, 915–18 (Bankr. W.D. Mo. 1999) (“There is no statutory prohibition against having two bankruptcy cases pending at the same time. . . . Courts holding that a debtor cannot have two simultaneous bankruptcy cases rely primarily on the Supreme Court’s decision in Freshman v. Atkins, 269 U.S. 121 [, 46 S. Ct. 41, 70 L. Ed. 193 (1925)] . . . . Although the language in Atkins might support an across-the-board prohibition against simultaneous filings, the actual holding and circumstances of the case do not. We find a more accurate and succinct statement of Atkins’ holding in Transamerica Credit Corporation v. Bullock (In re Bullock), 206 B.R. 389, 392–93 (Bankr. E.D. Va. 1997): . . . ‘At most, Atkins could be interpreted as stating that two cases which seek to discharge the same debt cannot be pending simultaneously.’. . . [M]ost courts have taken the approach that a Chapter 13 petition filed before the technical closing of the preceding Chapter 7 case but following an entry of discharge is permissible, but that the second filing and circumstances surrounding it should be considered in the court’s evaluation of whether the Chapter 13 plan is filed in good faith. . . . We believe this is the better reasoned and more logical approach.”).

 

12  In re Sanchez-Dobazo, 343 B.R. 742, 744–46 (Bankr. S.D. Fla. 2006).

 

13  See § 230.1 [ 11 U.S.C. § 1327(b): Vesting Effect on Property of Estate ] § 120.3  11 U.S.C. § 1327(b): Vesting Effect on Property of Estate.

 

14  Norton v. Hoxie State Bank, 61 B.R. 258 (D. Kan. 1986).

 

15  Fed. R. Bankr. P. 1015(a).

 

16  297 B.R. 922 (Bankr. S.D. Ga. 2003).

 

17  In re Hodurski, 156 B.R. 353, 356 (Bankr. D. Mass. 1993).

 

18  See Veterans Admin. v. Lundsford, 43 B.R. 184 (Bankr. N.D. Ga. 1984); Administrator of Veterans Affairs v. Lundsford, 39 B.R. 490 (Bankr. N.D. Ga. 1984).

 

19  Compare Turner v. Citizens Nat’l Bank (In re Turner), 207 B.R. 373, 378–79 (B.A.P. 2d Cir. 1997) (“[T]here is universal agreement . . . that where a debtor files for chapter 7 relief and then files for protection under chapter 13 before receiving a discharge in the original chapter 7 case, that the chapter 13 case is a nullity.”), with Transamerica Credit Corp. v. Bullock (In re Bullock), 206 B.R. 389, 392–93 (Bankr. E.D. Va. 1997) (On a creditor’s motion for relief from the stay, debtor is eligible for Chapter 13 while prior Chapter 7 case is pending and before entry of discharge in the Chapter 7 case. “[I]f the equities of a case so dictate and if a second filing will not materially hinder the efficient administration of the debtor’s estate, the court may recognize the viability of the second case.”). See also In re Pharao, No. 98-18510-SSM, 2000 WL 1449846, at *2 (Bankr. E.D. Va. Sept. 11, 2000) (unpublished) (When Chapter 13 case is filed after discharge in a prior Chapter 7 case but while the prior case is still open, ordinarily the appropriate remedy is a motion to dismiss the second case; court denies Chapter 7 trustee’s motion to dismiss the first case on the ground that dismissal of the first case would not vacate the discharge and thus “accomplishes nothing and provides no benefit to creditors.”).

 

20  See, e.g., In re Arellano, 363 B.R. 611, 613–14 (Bankr. D.N.M. 2007) (That prior Chapter 7 case remained open when current Chapter 13 petition was filed did not require dismissal when debtors were eligible for discharge but entry of discharge was delayed. Under Bankruptcy Rule 4004(a), debtors became eligible for a discharge on August 22, 2006, but discharge was not entered by clerk until November 20, 2006. On October 25, 2006, debtors filed current Chapter 13 case. Bankruptcy court sua sponte raised question whether Chapter 13 case should be dismissed. “[I]t would be unfair to punish the debtors in this case by dismissing the Chapter 13 case because the Clerk did not enter the Chapter 7 discharge ‘forthwith.’ . . . Unlike in [Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925)], the Debtors’ two cases are not seeking to discharge the same debts; the Chapter 13 is dealing only with remaining secured claims.”).

 

21  See, e.g., In re Scruggs, 320 B.R. 94, 96–97 (Bankr. D.S.C. 2004) (Debtor is not eligible in a Chapter 13 case filed after discharge but while Chapter 7 case is still pending. Debtor filed a Chapter 13 petition approximately four months after discharge in a still pending asset Chapter 7 case. One hundred four creditors were listed in both cases, but the debts were listed as contingent in the Chapter 13 case. Debtor’s counsel stated that the Chapter 13 filing before completion of the administration of the prior Chapter 7 case was necessary because the debtor desired to retain certain property and had fallen behind in payments during the Chapter 7 case. “The United States Supreme Court’s decision in [Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925),] has been cited for the proposition that two cases which seek to discharge the same debt cannot be pending simultaneously. . . . [T]he Court in [Johnson v. Home State Bank, 501 U.S. 78, 111 S. Ct. 2150, 115 L. Ed. 2d 66 (1991),] did not recognize ‘simultaneous chapter 20 filings’ which seeks [sic] to discharge the same debt. . . . The filing of a chapter 13 petition during the administration of assets by a Chapter 7 Trustee (in an asset case) may require the return of such assets to the debtor, thus allowing the debtor the benefit of the chapter 7 discharge without the corresponding burden of liquidation of non-exempt assets . . . . [T]he Court finds this simultaneously filed Chapter 13 case should be dismissed.”).

 

22  See §§ 15.1 [ What Is a Noncontingent Debt? ] § 15.1  What Is Noncontingent Debt? and 17.1 [ Disputed Debts ] § 17.1  Disputed Debts.

 

23  See § 14.1 [ Are Claims Split under 11 U.S.C. § 506(a)? ] § 14.4  Are Claims Split under 11 U.S.C. § 506(a)?. 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.

 

24  See §§ 12.1 [ Time for Determining Debt ] § 14.2  Time for Determining Debt and 325.1 [ Absolute Right of Debtor? ] § 148.2  Absolute Right of Debtor? for discussion of the timing of the eligibility calculus at conversion from Chapter 7 to Chapter 13. See, e.g., In re Taylor, 261 B.R. 877, 889 (Bankr. E.D. Va. 2001) (Conversion to Chapter 7 of Chapter 13 case filed after discharge but before closing of prior Chapter 7 case will not meaningfully benefit creditors because all creditors were discharged in prior Chapter 7 case. “No creditor would be entitled to file a proof of claim and none would participate in any distribution because of the prior discharge.”).

 

25  In re Redburn, 193 B.R. 249 (Bankr. W.D. Mich. 1996) (Debtor agreed to a judgment in favor of an investor group in 1991 in the amount of $303,219.80. In 1992, debtor filed a Chapter 7 case and the investors filed a complaint to determine the dischargeability of their claims. Before the nondischargeability proceeding went to trial, the debtor filed a Chapter 13 case. Debts were not contingent simply because of nondischargeability litigation in the simultaneously pending Chapter 7 case. Debtor is ineligible because prepetition state court judgment liquidated the plaintiff’s claims at an amount greater than $250,000, and the claims were not contingent because all the events giving rise to the debtor’s liability occurred prior to the Chapter 13 petition.).

 

26  In re Taylor, 261 B.R. 877 (Bankr. E.D. Va. 2001) (Filing Chapter 13 seven days after Chapter 7 discharge and on the same day that the debtor’s husband filed a separate Chapter 7 petition has the effect of discharging all of the debtor’s unsecured debt while keeping the equity in real property that was significantly undervalued in the Chapter 7 schedules. Remedy is to reopen the debtor’s and the debtor’s husband’s Chapter 7 cases and consolidate those cases with the pending Chapter 13. The Chapter 13 case is then converted to Chapter 7 to permit all unsecured creditors to share in the value of the real property.).

 

27  No. 02-84004, 2002 WL 32001418 (Bankr. C.D. Cal. Nov. 19, 2002) (unpublished).

 

28  2002 WL 32001418, at *2.

 

29  278 B.R. 432 (Bankr. N.D. Ohio 2002).

 

30  278 B.R. at 437.

 

31  278 B.R. at 437.

 

32  295 B.R. 16 (Bankr. E.D.N.Y. 2003).

 

33  See § 148.2  Absolute Right of Debtor?326.1 [ Effects of Conversion from Chapter 7 to Chapter 13 ] § 148.3  Effects of Conversion from Chapter 7 to Chapter 13.

 

34  359 B.R. 901 (Bankr. N.D. Ill. 2007).

 

35  11 U.S.C. §§ 727(d) and (e) and 1328(e) address revoking the Chapter 7 or 13 discharge upon a finding of fraud. See § 356.1 [ Revocation of Discharge and Relief from Discharge Order ] § 161.2  Revocation of Discharge and Relief from Discharge Order.

 

36  See, e.g., In re Strohscher, 278 B.R. 432, 437 (Bankr. N.D. Ohio 2002) (There is no per se prohibition against simultaneously pending Chapter 7 and Chapter 13 cases, but the second filing is subject to strict scrutiny: “[I]t is difficult for this Court to conceive of any legitimate reason as to why a debtor would, prior to receiving a discharge, need to file a subsequent bankruptcy case. Therefore, the underlying principle that a debtor may only file a subsequent bankruptcy case after first receiving a discharge will be applied by the Court, unless the debtor can demonstrate exceptional and unique circumstances which would necessitate the granting of extraordinary relief.”).

 

37  See § 179.1 [ Frequency of Filing Bankruptcy—Chapter 20 and Beyond ] § 104.2  Frequency of Filing Bankruptcy—Chapter 20 and Beyond. See, e.g., In re Farrington, 129 B.R. 271 (Bankr. M.D. Fla. 1991) (Although filing of a Chapter 13 case after discharge but before closing of a prior Chapter 7 case is not per se prohibited, it is indicative of bad faith in the totality of the circumstances test. In the absence of changed circumstances, and where it appears that debtor was not eligible for Chapter 13, but filed the original Chapter 7 case to create Chapter 13 eligibility and to then save only debtor’s residence at expense of all other creditors, debtor is eligible but has filed a case in bad faith that cannot be confirmed and must be dismissed.).

 

38  See §§ 81.2 [ Other Cause for Relief ] § 64.2  Other Cause for Relief and 334.1 [ Cause for Dismissal, Including Bad-Faith, Multiple and Abusive Filings ] § 152.4  Cause for Dismissal, Including Bad-Faith, Multiple and Abusive Filings. See, e.g., In re Barnes, 231 B.R. 482, 485 (E.D.N.Y. 1999) (In alternative holding, debtor acted in bad faith by filing Chapter 13 while Chapter 7 case was pending and while a creditor was in the process of foreclosing on real property. The Chapter 13 filing was “clearly an effort to retain this property, by seeking an automatic stay of the foreclosure proceedings.” The $500 fine “was neither improper nor excessive given the findings . . . that the Chapter 13 petition was filed in bad faith.”); In re Cole, No. 07-41602-659, 2007 WL 2908195 (Bankr. E.D. Mo. Sept. 12, 2007) (unpublished) (Simultaneously filed Chapter 13 case is dismissed for bad faith when debtor caused delay in payment to Chapter 7 creditors and proposed Chapter 13 plan will further delay payment.).

 

39  See §§ 21.1 [ 180-Day Bar to Eligibility in 11 U.S.C. § 109(g)—In General ] § 25.1  180-Day Bar to Eligibility in 11 U.S.C. § 109(g)—In General, 22.1 [ 11 U.S.C. § 109(g)(1)—Willful Failure to Abide by Court Order or to Appear in Proper Prosecution ] § 25.2  11 U.S.C. § 109(g)(1)—Willful Failure to Abide by Court Order or to Appear in Proper Prosecution and 23.1 [ 11 U.S.C. § 109(g)(2)—Voluntary Dismissal after Request for Relief from Stay ] § 25.3  11 U.S.C. § 109(g)(2)—Voluntary Dismissal after Request for Relief from Stay. See, e.g., Clifton Sav. Bank v. Jackson (In re Jackson), 184 B.R. 16, 21 (D.N.J. 1995) (Because the debtors have a pending Chapter 11 case, the debtors’ newly filed Chapter 13 case must be dismissed. Debtors filed a Chapter 11 case to manage a mortgage that had been reduced to foreclosure judgment before the filing. Five days after the 1994 enactment of § 1322(c), the mortgage holder moved for relief from the stay and conversion in the Chapter 11 case. The debtors responded with an “Application for Appropriate Action” that asked the bankruptcy court to arrange the dismissal of the Chapter 11 case in a manner that would permit the debtors to refile a Chapter 13 case to take advantage of the 1994 amendments without running afoul of § 109(g)(2). The bankruptcy court accommodated the debtors. On appeal, the district court found that the debtors’ motion was in reality a motion to convert to Chapter 13 and treated the immediate refiling as a simultaneous case. “[B]ecause we find that the Chapter 11 case was actually converted to a Chapter 13 proceeding, we must dismiss [the new Chapter 13 filing]. ‘If a bankruptcy action is pending, a bankruptcy action which purports to affect the same debt cannot be maintained.’”); In re Wayne, No. 03-01891, 2005 WL 612926, at *1–*2 (Bankr. D.D.C. Mar. 12, 2005) (unpublished) (Although it was an abuse of the bankruptcy system to file a Chapter 13 case to impose the automatic stay when a prior Chapter 7 case was still pending in which relief from the stay had been granted to a mortgage holder, sanctions were not imposed on debtor’s counsel because counsel thought that the Chapter 7 case was ready to be closed. Citing Freshman v. Atkins, 269 U.S. 121, 46 S. Ct. 41, 70 L. Ed. 193 (1925), “[w]ith the case remaining ongoing a new filing is barred because ordinarily, a new bankruptcy case ought not be filed during the pendency of another bankruptcy case. . . . The filing of this second case was for the purpose of obtaining a new automatic stay when the automatic stay had already been terminated in the prior case. By reasons of § 109(g)(2), the debtor could not have achieved that result by voluntarily dismissing the first case and then filing this second case. . . . So long as the prior case had not been dismissed . . . the filing of this case to achieve an automatic stay, and to circumvent § 109(g)(2), constituted an abuse of the bankruptcy system.”).

 

40  See, e.g., In re Pingleton, No. 03-71986, 2003 WL 21976028, at *2 (Bankr. C.D. Ill. Aug. 18, 2003) (unpublished) (“This case is an example of . . . abuse. The stay was lifted on April 17, 2003, and the Chapter 13 petition was filed on April 21, 2003 . . . . The Debtors were clearly trying to gain the benefit of a new automatic stay, something they could not have done if they had converted their Chapter 7 case to a Chapter 13 case.”); In re Lord, 295 B.R. 16, 19–20 (Bankr. E.D.N.Y. 2003) (“[C]ourts have . . . voiced concerns regarding the potential for abuse of the Bankruptcy Code in permitting ‘simultaneous Chapter 20’ filings, particularly where the stay has been lifted and the debtor filed a Chapter 13 immediately before the foreclosure sale of his home, in an attempt to obtain another automatic stay and frustrate the foreclosure. . . . That is exactly what occurred in this case. . . . [T]his chapter 13 case should be dismissed.”).

 

41  Pub. L. No. 109-8, 119 Stat. 23 (2005).

 

42  See §§ 431.4 [ In General ] § 59.1  In General434.2 [ Proof of Good Faith ] § 61.4  Proof of Good Faith.

 

43  See §§ 432.1 [ When Does § 362(c)(3) Apply? ] § 60.1  When Does § 362(c)(3) Apply? and 433.1 [ When Does § 362(c)(4) Apply? ] § 61.1  When Does § 362(c)(4) Apply?.