11 U.S.C. §§ 1307, 1328(f); Confirmation of Chapter 13 Plan; Discharge; Good Faith
In re Lewis, 2005 Bankr. LEXIS 471, Case No. 05-14070, In re Tobias, 2005 Bankr. LEXIS 471, Case No. 14078 (Bankr. S.D. Ga. March 27, 2006)(Dalis)
Debtors each filed Chapter 13 petitions and 100% plans, even though they were ineligible for a discharge pursuant to §1328(f) (Chapter 7 discharge received within 4 years). The Chapter 13 trustee moved for dismissal of both cases, arguing that because debtors are ineligible for a discharge they are ineligible for Chapter 13 relief. Alternatively, the trustee argues that the petitions were filed in bad faith and constituted an unreasonable delay that is prejudicial to creditors.
The court found that eligibility to be a debtor is determined by §109(e), and that §1328(f) is not an eligibility provision. Because the debtors otherwise qualify under §109(e), they are eligible to be debtors. Further, under the test set forth in In re Kitchens, 702 F.2d 885 (11th Cir. 1983), the debtors filed their petitions in good faith. Eligibility for a discharge is one element under the test, but the debtors have proposed 100% plans that otherwise meet all of the elements of good faith. Under the circumstances, the plans were superior to a race to the courthouse, and confirmable
