Timothy R. Brown and Kendra L. Brown, 671 B.R. 461

Debtors Timothy R. Brown and Kendra L. Brown filed for Chapter 13 bankruptcy after a state court garnishment of their bank accounts in connection with a $229,548.35 judgment obtained by Ferrari Financial Services for a missing Ferrari vehicle.
The Browns owned several high-value assets, including a Ferrari Spider and a Bentley Mulsanne, both of which had allegedly vanished under dubious circumstances; the Browns provided inconsistent explanations for these disappearances and failed to take reasonable steps to recover them.
The debtors repeatedly filed materially incomplete and inaccurate bankruptcy schedules, omitting significant assets and creditors, and only partially amending after repeated notice.
The Browns engaged in a pattern of failure to comply with court orders, missed depositions, failed document production, and were held in contempt; their testimony was found to be inconsistent and not credible.
Multiple unconfirmable Chapter 13 plans were proposed by the Browns, each failing to meet basic statutory requirements for feasibility and good faith.
Creditors (Ferrari and US Bank) and the Chapter 13 trustee moved to convert the case to Chapter 7 based on bad faith and unreasonable delay; the court converted the case, finding this outcome best served creditors’ interests.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether cause exists to convert the case due to bad faith and statutory factors	Browns acted in bad faith pre- and post-petition, failed to comply with requirements, and delayed the case	Blame on prior counsel, claimed vehicle loss not their fault, omissions unintentional	Cause found; conversion warranted under §1307(c)
Whether the debtors’ Chapter 13 plans were filed in good faith and were confirmable	Plans failed to satisfy requirements, underfunded, omitted key creditors	Plans attempted to address claims; omissions corrected in amendments	No good faith; plans facially unconfirmable
Whether pre-petition conduct, including misuse of social security numbers and asset transfers, evidences bad faith	Pattern of deception and inconsistent testimony supports bad faith finding	Claims of identity theft and honest mistakes, no intent to deceive	Pre- and post-petition bad faith found
Whether conversion or dismissal is in the best interests of creditors and the estate	Conversion will marshal assets and prevent further abuse	Dismissal would permit state law remedies, possible bankruptcy refiling	Conversion is in best interests of creditors

Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (prepetition bad-faith conduct may bar relief in Chapter 13)
Sugar v. Burnett, 130 F.4th 358 (bad faith constitutes cause for conversion/dismissal; totality of circumstances must be considered)
Janvey v. Romero, 883 F.3d 406 (bad faith for cause requires an abuse of the provisions or spirit of bankruptcy law)
In re Kestell, 99 F.3d 146 (cause for conversion or dismissal includes judicially recognized bad faith)
United States v. Craft, 535 U.S. 274 (entireties property may be reached by IRS for individual tax debts)