517 B.R. 88
Bankr. W.D. Mich.2014Background
- Debtor Daniel C. Riedy filed a second Chapter 13 petition on August 26, 2014, less than a year after dismissal of his first case.
- Eaton Federal Savings Bank obtained a state court foreclosure judgment against Debtor for the Mortgaged Realty in Eaton County, Michigan.
- The State Court Judgment found Debtor indebted to Bank in the specified amount and authorized foreclosure; foreclosure notice could not be published before June 1, 2014.
- Debtor requested extension of the automatic stay beyond 30 days under 11 U.S.C. § 362(c)(3) due to asserted changed finances from business improvements and license reinstatement.
- Bank objected, arguing presumptive lack of good faith under § 362(c)(3)(C) because of serial filing and missing schedules/plans, among other concerns.
- The court granted the Motion, finding, based on the totality of circumstances, that the second bankruptcy case was filed in good faith.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the automatic stay should be extended under § 362(c)(3). | Bank argues lack of good faith due to serial filing and missing documents. | Debtor asserts changed circumstances and good faith justify extension. | Yes, stay extended. |
| Whether Debtor established good faith by clear and convincing evidence. | Bank contends evidence insufficient given lack of schedules and plans. | Debtor's credible testimony shows progress and reform of business and finances. | Yes, good faith proven by clear and convincing evidence. |
| Whether Debtor can fund and perform a Chapter 13 plan to justify extension. | Bank doubts funding ability due to incomplete documents and uncertain plan. | Debtor testified to potential plan funding (sale of house, timely payments, adequate protection). | Yes, narrowly satisfied ability to fund and perform. |
Key Cases Cited
- In re Havner, 336 B.R. 98 (Bankr.M.D.N.C. 2006) (twelve-factor approach to good faith in feasibility/context guidance)
- In re Baldassaro, 338 B.R. 178 (Bankr.D.N.H. 2006) (totality of circumstances in determining good faith)
- In re Galanis, 334 B.R. 685 (Bankr.D.Utah 2005) (good faith considerations in Chapter 13 plans)
- In re Dowden, 429 B.R. 894 (Bankr.S.D.Ohio 2010) (application of twelve-factor test for plan feasibility)
- In re Washington, 443 B.R. 389 (Bankr.D.S.C. 2011) (totality of circumstances test for good faith in filings)
- In re Okoreeh-Baah, 836 F.2d 1030 (6th Cir. 1988) (use of totality of circumstances in related contexts)
- In re Alt, 305 F.3d 413 (6th Cir. 2002) (high-level standard for rebutting bad-faith presumptions)
- In re Brown, 293 B.R. 865 (Bankr.W.D.Mich. 2003) (contextual considerations for chapter 13 proceedings)