In re: James H. Nowacki - Order Dismissing Case

Apr 27, 2026
25-20892

ORDER DISMISSING CASE

This matter came before the Court for a final hearing on April 23, 2026, with respect to the Court‘s Order to Show Cause (Dkt. No. 105) why this case should not be dismissed for debtor James H. Nowacki‘s (the “Debtor“) failure to file a confirmable Chapter 13 plan. At the hearing, Debtor appeared pro se, the Lake County Treasurer (the “Treasurer“) appeared by counsel Kimberly Mouratides, and the Chapter 13 Trustee Paul Chael appeared by counsel Amy Godshalk.1 Debtor filed for relief under Chapter 13 of the United States Bankruptcy Code on May 3, 2025. Debtor possesses a fee simple interest in approximately 350 parcels of real estate located in Lake County, Indiana. With some exceptions, many of these parcels are vacant and are not producing income.

Shortly after Debtor filed his petition for relief, the Treasurer filed a secured claim in the amount of $2,985,673.91 for unpaid ad valorem property taxes. Additionally, on April 13, 2026, the Treasurer filed a motion for the allowance of administrative expenses in the amount of $56,667.75 for unpaid property taxes that have accrued post-petition. (Dkt. No. 107). On May 3, 2025, Debtor filed a proposed plan of reorganization and subsequently filed an amended plan on June 27, 2025. (Dkt. No. 38). Pursuant to the terms of Debtor‘s amended plan, he will pay $7500 per month for a term of 60 months and proposes to sell at least 165 parcels and “other various real properties” in the next 3 to 12 months. Further, the amended plan provides that debtor will be seeking tax payment credits from the Treasurer because of “errors in their calculations and utilizations of incorrect tax rates.”

However, as of April 2026, Debtor has not objected to the Treasurer‘s claim despite the Court directing Debtor to do so by September 15, 2025. Moreover, as of April 2026, the record reflects that Debtor has not sold any property whatsoever. And although Debtor has been remitting payments pursuant to the terms of his proposed amended plan, and the Trustee has collected approximately $75,000 to date, much of that amount is now subject to the Treasurer‘s administrative expense claim for unpaid post-petition property taxes.

First, for the reasons stated on the record in open Court at the hearing held on April 23, 2026, the Court finds that Mr. Nowacki is not qualified to be a debtor under Chapter 13 of the United States Bankruptcy Code pursuant to 11 U.S.C. § 109(e) and, therefore, this case should be dismissed pursuant to 11 U.S.C. § 105(a). In addition, Debtor‘s amended plan is not confirmable under 11 U.S.C. § 1325(a)(1), as it does not comply with the applicable provisions of the Bankruptcy Code. Further, as discussed in open Court, Debtor‘s plan is highly speculative and not feasible. Considering the Treasurer‘s $2.9 million dollar secured claim, there is no likelihood that Debtor will be able to propose a plan that complies with 11 U.S.C. § 1325(a)(6) given Debtor‘s stated income and expenses, along with the speculative real estate sales and the lack of any sales to date. Therefore, this case should also be dismissed pursuant to 11 U.S.C. § 1307.

Finally, at the hearing the Treasurer requested that with the dismissal the Court should bar Debtor from refiling bankruptcy for a period. The Court took evidence on this issue at a subsequent hearing that same day and, for the reasons stated in open Court, found that the Treasurer failed to carry its burden and denied this request.

IT IS THEREFORE ORDERED that, for all the foregoing reasons, this case is hereby DISMISSED.

IT IS FURTHER ORDERED that the Chapter 13 Trustee shall not make any disbursements until the Treasurer‘s pending motion for administrative expenses is resolved. (Dkt. No. 107).

All of the foregoing is ordered, adjudged, and decreed this 27th day of April 2026 in Hammond, Indiana.

James R. Ahler, Judge

United States Bankruptcy Court

Notes

1
Also appearing was attorney Scott R. Bilse on behalf of the Little Calumet River Basin Development Commission.