In re Uche, 555 B.R. 57

Debtor is a cardiologist who personally guaranteed a mortgage on his medical practice’s office building; the practice defaulted after banking routing issues interrupted Medicare deposits.
The practice cured the mortgage default with payments totaling $44,563.70 (Nov 2010–Mar 2011) and continued paying through Dec 2011, but BB&T returned the Dec. 2011 payment.
BB&T filed foreclosure in April 2011 and obtained a final foreclosure judgment in June 2014; after the sale, the state court entered a deficiency judgment of $739,062.21 against the practice (and potentially against Debtor under the guaranty).
Two days before BB&T’s final deficiency hearing, Debtor filed a Chapter 7 petition seeking discharge of just over $1,000,000 in unsecured debt; BB&T is the largest creditor.
Debtor claimed nearly $800,000 in exemptions, intends to reaffirm secured debt on some exempt property, and reports monthly income and expenses of approximately $15,898.80 and $15,727.71.
BB&T moved to dismiss under 11 U.S.C. § 707(a) for bad faith, arguing (1) the filing was to delay BB&T’s deficiency collection and (2) Debtor has significant disposable income to repay creditors.

Issue	Plaintiff's Argument (BB&T)	Defendant's Argument (Debtor)	Held
Whether Debtor filed Chapter 7 in bad faith such that § 707(a) dismissal for cause is warranted	Filing was primarily to delay/ frustrate BB&T’s deficiency recovery; bad faith shown by timing and Debtor’s financial ability to pay	Filing was a permissible exercise of Bankruptcy Code protections to obtain a fresh start; debts are primarily business-related and Debtor lacks sufficient unencumbered assets to pay	Denied — no bad faith shown under totality-of-circumstances standard; filing not an abuse or misuse of Code
Whether Debtor’s income/ability to pay justifies dismissal under § 707(a)	Debtor’s reported disposable income indicates ability to repay, supporting dismissal	Ability-to-pay is not a proper basis under § 707(a); presumption of abuse applies only under § 707(b) for primarily consumer debts	Denied — ability to pay argument is improper under § 707(a); debts are primarily business debts, so § 707(b) framework does not apply

In re Piazza, 719 F.3d 1253 (11th Cir. 2013) (endorses totality-of-the-circumstances approach for bad faith under § 707(a) and rejects rigid multifactor test)
In re Simmons, 200 F.3d 738 (11th Cir. 2000) (bad-faith dismissal review and precedent cited by Piazza)
Albany Partners, Ltd. v. Westbrook, 749 F.2d 670 (11th Cir. 1984) (discussion of good-faith filing standard)
In re Natural Land Corp., 825 F.2d 296 (11th Cir. 1987) (no particular test for good-faith filing; fact-driven inquiry)
Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007) (debtor’s procedural rights and equitable considerations in bankruptcy)
Grogan v. Garner, 498 U.S. 279 (1991) (standard for proving exceptions to discharge)