Opinion
Case No. 04-23456T.
March 31, 2005
ORDER
AND NOW, this 31st day of March, 2005, it is ORDERED that the motion filed by Frederick L. Reigle, Esquire, the Standing Chapter 13 Trustee ("the Chapter 13 Trustee") requesting dismissal of this chapter 13 case with prejudice is GRANTED as the court finds that Debtor filed this bankruptcy case in bad faith. In re Lilley, 91 F.3d 491, 496 (3rd Cir. 1996); In re Narod, 138 B.R. 478, 482 (E.D. Pa. 1992); In re Dami, 172 B.R. 6, 10 (Bankr. E.D. Pa. 1988).
On March 14, 2005, Debtor filed a motion to strike the Chapter 13 Trustee's brief because it was allegedly filed in violation of Fed.R.Civ.P. 11(a). We first note that Fed.R.Civ.P. 11(a) does not apply in bankruptcy cases. Rather, Fed.R.Bankr.P. 9011(a), which is almost identical to Fed.R.Civ.P. 11(a), is the Rule which would apply in bankruptcy cases. However, a review of Debtor's motion to strike reveals that Debtor fails to allege any grounds to support a finding that the Chapter 13 Trustee violated Fed.R.Bankr.P. 9011(a), and we therefore, summarily deny Debtor's motion to strike the Chapter 13 Trustee's brief.
It is well established that the filing of a chapter 13 petition in bad faith constitutes grounds for dismissal under 11 U.S.C. § 1307(c). In re Lilley, 91 F.3d 491, 496 (3rd Cir. 1996); Lucabaugh v. Internal Revenue Service (In re Lucabaugh), No. 01-2254, 2001 WL 997416 *3 (E.D. Pa. June 26, 2001); In re Narod, 138 B.R. 478, 482 (E.D. Pa. 1992); In re Dami, 172 B.R. 6, 10-11 (Bankr. E.D. Pa. 1988). The existence of a bad faith is determined by reviewing the "totality of the circumstances." Examples of bad faith include filing a petition without intending to perform the statutory requirements of the Bankruptcy Code, conduct by the debtor either before or during a case which constitutes an abuse of the provisions, purposes or spirit of the Bankruptcy Code and instances where the debtor lacks a sincere desire to pay back his debts or where the debtor has no hope of a successful reorganization. Lucabaugh, 2001 WL 997416 at *3; In re Spear, 203 B.R. 349, 353 (Bankr. D. Mass. 1996); Narod, 138 B.R. at 482. In addition, a debtor's history of serial bankruptcy filings and dismissals may constitute evidence of bad faith. Lucabaugh, 2001 WL 997416 at *3; Dami, 172 B.R. at 10.
Turning to the facts before us, we note that this is the sixth chapter 13 petition filed by Debtor and that all of Debtor's prior cases were dismissed. More specifically, while one of Debtor's prior cases was dismissed voluntarily by Debtor, the remaining four cases were dismissed by Order of this Court. In fact, the last two chapter 13 cases filed by Debtor were dismissed with prejudice by this Court and the deficiencies found to exist in Debtor's prior cases also exist in the present case. First, we note that Debtor has failed to file a confirmable plan which adequately provides for the claim of the Internal Revenue Service ("IRS"). To explain, by Order entered on July 21, 1998 in Debtor's fourth bankruptcy case (docketed to Case No. 97-23893T), we overruled Debtor's objection to the IRS' proof of claim. The IRS also filed a proof of claim (claim number 3) in this bankruptcy case on October 15, 2004 which states that the IRS holds a priority claim in the amount of $10,299.71 and an unsecured claim in the amount of $25,046.19. To date, Debtor has yet to file an objection to the IRS' claim. Nonetheless, on March 2, 2005, Debtor filed an amended chapter 13 plan which calls for a monthly plan payment of $5.00 to be paid for twelve months. Obviously, Debtor's amended plan fails to adequately provide for the IRS' claim and therefore, it is not confirmable. In addition, Debtor has failed to file tax returns for the years 1997 through the present and Debtor does not have insurance on any of his properties in spite of the fact that tenants reside at two of the properties. Based upon these facts, we find that the totality of the circumstances demonstrate that Debtor filed this chapter 13 petition in bad faith, without an honest intent to reorganize and propose and consummate a confirmable chapter 13 plan. Accordingly, we grant the Chapter 13 Trustee's motion to dismiss this case with prejudice.
IT IS FURTHER ORDERED that this chapter 13 case is hereby DISMISSED WITH PREJUDICE and Debtor is hereby barred from filing any future bankruptcy petitions, either individually or jointly with a spouse, under any chapter of the United States Bankruptcy Code without first obtaining leave from this Court.