648 B.R. 335
Bankr. D.C.2023Background
- Debtor Jaspreet Attariwala filed Chapter 13 on December 17, 2019 after protracted pre‑petition litigation with BioConvergence LLC (doing business as Singota) in Indiana, including injunctions, contempt orders, and contested expert fees.
- Debtor’s operative Amended Chapter 13 Plan (filed March 16, 2020) proposed $300/month for 60 months ($18,000), paying unsecured creditors pro rata; secured obligations would be paid outside the plan and no priority claims were scheduled.
- Singota objected to confirmation, asserting lack of good faith in the petition (§1325(a)(7)), infeasibility (§1325(a)(6)), and failure to meet the best‑interest test (§1325(a)(4)); Singota also pursued extensive pre‑ and post‑petition discovery.
- At an August 21, 2020 evidentiary hearing Judge Teel found the plan feasible and that Debtor had proceeded in good faith (applying the Colston factors and Barnes’s “honesty of intention” standard), but entry of the confirmation order was stayed while discovery disputes persisted and the parties entered a Consent Order delaying entry pending further discovery.
- After additional discovery skirmishes, a limited 2022 confirmation hearing addressed only whether the petition itself was filed in good faith under §1325(a)(7); the court found some disclosure/delay issues but concluded, on balance, the totality of circumstances supports Debtor’s good faith filing and confirmed the Amended Plan.
Issues
| Issue | Singota's Argument | Debtor's Argument | Held |
|---|---|---|---|
| Whether the petition was filed in good faith under 11 U.S.C. §1325(a)(7) | Debtor filed to thwart Singota and preserve assets; pre‑petition conduct, payments from accounts, delayed/incomplete disclosures show bad faith | Debtor acted with honest intent to rehabilitate, faced imminent job loss and litigation costs, and consulted counsel before filing | Court found, after applying Barnes/Colston factors, that Debtor filed in good faith; §1325(a)(7) satisfied and plan may be confirmed |
| Feasibility of plan under §1325(a)(6) | Debtor lacks ability to make all payments given past income and litigation exposure | Debtor has consistent trustee payments, will use exempt retirement funds if necessary, and proposed a feasible $300/month × 60 months | Court found plan feasible under §1325(a)(6) |
| Best‑interest test under §1325(a)(4) | Plan may shortchange creditors if nonexempt proceeds (e.g., from counterclaims) are omitted | Debtor consented to include any nonexempt proceeds from pending claims and offered 60 months (beyond the 36‑month minimum) | Court found best‑interest requirement met and Debtor’s proposal sufficient |
| Whether outstanding discovery justified staying or denying confirmation | Additional produced documents after the 2020 hearing (and unresolved discovery) show concealment and justify delay of confirmation | Trustee did not oppose confirmation; Debtor contested need for further delay and cooperated with discovery; prior evidentiary record supported confirmation | Court rejected indefinite delay; parties’ Consent Order set limited abeyance but ultimately unresolved discovery did not overcome record of good faith; confirmation ordered |
Key Cases Cited
- Barnes v. Whelan, 689 F.2d 193 (D.C. Cir. 1982) (good‑faith standard in Chapter 13 framed as "honesty of intention" and courts use totality‑of‑circumstances)
- RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S. 639 (U.S. 2012) (principle that specific statutory provisions must be given effect; canon applied to separate §1325 subsections)
- In re Colston, 539 B.R. 738 (Bankr. W.D. Va. 2015) (sets out multi‑factor totality‑of‑circumstances test for good faith under §1325)
- In re Powers, 554 B.R. 41 (Bankr. N.D.N.Y. 2016) (distinguishes §1325(a)(3) and §1325(a)(7); §1325(a)(7) tests petition filing fairness and motive)
- Wolkowitz v. Beverly (In re Beverly), 374 B.R. 221 (B.A.P. 9th Cir. 2007) (cautions about distinguishing legitimate pre‑bankruptcy planning from bad faith)