Georgia Bankruptcy Blog

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

It seems to me that the Tobias and Lewis decisions answer part of the question of how the Courts will treat a 13 filed within 4 hears of a Chapter 7 filing.
These were both 100% cases which certainly makes it easier for the Judge to confirm.
My question - what about the rights of the creditors? Would accrued interest from credit card debt become due and payable post petition? What about a 50% plan - without a discharge, the 50% not paid in the plan is still outstanding.
I can see the value of filing a 13 without the hope of a discharge if the purpose is to stop a foreclosure - but it seems to me that the utility of such a filing might be less in other situations.
Jonathan Ginsberg
Ginsberg Law Offices
Atlanta, GA

Hi I would like to ask a couple of questions.

#1 we filed a chapter 7 a year ago and a creditor came after us stating we lied on our bankruptcy petition. While after we went over the doc. with another attorney our first attorney entered things that were not supposed to be there. Now the the creditor attorney has told our we have to 100% of our debt back to all creditors.
#2Can we write to the state bar and hold our first attorney accountable for what he has done to us, we have living a life of pure hell for and we are still not over all of this.
#3 We were told that we have to aork a trustee, that will controll our life for five years. What happen to our tax returns (if we get one) they say that the trustee will take it from us?
#4 we have a daughter that will start college soon, can she take oout student loans?