MEMORANDUM DECISION ON CHAPTER 13 CASES WHILE CHAPTER 7 CASES ARE PENDING FOR THE SAME DEBTOR
These matters 1 are before us on the motions of the Trustee to dismiss the Chapter 13 cases while Chapter 7, 11 U.S.C. §§ 101 et seq., cases are pending for the same debtor. We granted the Trustee’s motion in the Kosenka case because the Debtor had not obtained a discharge in his Chapter 7 case prior to the filing of his Chapter 13 case. We denied the Trustee’s motion in the Parduhn case because the Debtor’s Chapter 13 case was filed after Parduhn had received his Chapter 7 discharge.
At pre-hearings on the motions to dismiss in these two Chapter 13 cases, consolidated at the request of the Chapter 13 Trustee, 2 we granted and denied respectively, from the bench, the Trustee’s motion to dismiss the Chapter 13 cases involving Ko-senka and Parduhn. The Chapter 13 Trustee asked that we issue a written Opinion to provide guidance to the bankruptcy bar of this District. We oblige him.
Kosenka filed his Chapter 13 case on October 7, 1988 while his Chapter 7 case was still pending. He received his Chapter 7 discharge on March 7, 1989. No final report and account had been filed by the Chapter 7-Trustee while the Trustee’s motion to dismiss was pending.
Parduhn filed his Chapter 13 case on February 15, 1989. He received his Chapter 7 discharge on September 30, 1988. His Chapter 7 case was still open pending the Chapter 7 Trustee’s final report and account.
The issue is quite focused. May a debtor have a Chapter 13 case pending simultaneously with a Chapter 7 case? 3
11 U.S.C. §§ 109(a) and (b) defines who may be a debtor under Chapter 7:
(a) Notwithstanding any other provision of this section, only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title.
(b) A person may be a debtor under chapter 7 of this title only if such person is not—
(1) a railroad;
(2) a domestic insurance company, bank, savings bank, cooperative bank, savings and loan association, building and loan association, homestead association, credit union or industrial bank or similar institution which is an insured bank as defined in section 3(h) of the Federal Deposit Insurance Act (12 USC 1813(h)); or
(3) a foreign insurance company, bank, savings bank, cooperative bank, savings and loan association, building and loan association, homestead association, or credit union, engaged in such business in the United States.
11 U.S.C. § 109(e) defines who may be a debtor under Chapter 13:
*42 (e) Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $100,000 and noncontingent, liquidated, secured debts of less than $350,000, or an individual with regular income and such individual’s spouse, except a stockbroker or a commodity broker, that owe, on the date of the filing of the petition, noncontin-gent, liquidated, unsecured debts that aggregate less than $100,000 and non-contingent, liquidated, secured debts of less than $350,000 may be a debtor under chapter 13 of this title.
Neither of these subsections present a prohibition against two simultaneous Title 11 cases, but logic tells us a debtor must choose one chapter over another. In bankruptcy, however, our logic may fail us. Moreover, Title 11 is replete with references for conversion from one chapter to another, see, §§ 706, 4 1112(a), 5 1208(a), 6 and 1307(a). 7 These sections certainly indicate a preference by the drafters of Title 11 for a debtor to choose which section of the Code it desires to be adjudicated under.
The Trustee argues for a per se rule that only one chapter case at a time may be pending under Title 11. He did not, however, point to any statutory authority for his proposition. Punting at oral argument, he points to Rules of Practice and Procedure in Bankruptcy Rule 1015, Consolidation or Joint Administration of Cases pending in Same Court. 8 We rule the application of Rule 1015 to the matter sub judice is entirely inappropriate.
A reading of Rule 1015(a) shows that the rule does not address the filing of two or *43 more petitions under different chapters by the same entity, but rather, as the Advisory Committee Note (1985) suggests, it is applicable when the same debtor is named in both voluntary and involuntary petitions; when a husband and wife have filed a joint petition under § 302; when two or more involuntary petitions are filed against the same debtor or by virtue of a transfer of one or more petitions from another Court. Moreover, the use of the words “the court may order consolidation of the cases” makes application of Rule 1015 permissive and discretionary with the Court.
Subsection (b) of Rule 1015 involves joint administration of cases where two or more petitions are pending in the same Court by or against a husband and wife or a partnership and one or more of its general partners, or two or more general partners or a debtor or affiliate. Again, the language of the rule indicates a Court may order a joint administration of the estate (emphasis ours).
Finally, there is a distinction between consolidation and joint administration which must be recognized. Consolidation of cases implies a unitary administration of the estate, and ordinarily is exercised when two or more petitions are filed by or against the same debtor, as opposed to joint administration which usually involves two different but related debtors. Consolidation depends upon substantive considerations which affect the substantive rights of creditors of the different estates. See,
Sampsell v. Imperial Paper & Color Corp.,
We turn now to the question posed by the Chapter 13 Trustee; namely, whether a debtor may maintain two simultaneous bankruptcy cases, one under Chapter 7 and the other under Chapter 13. The precedents on this issue are divided into two camps. We side with the minority and hold that a debtor may file for Chapter 13 relief after receiving a Chapter 7 discharge but before the trustee’s final account and report. We believe the majority misinterpreted and, consequently, misapplied the holding in
Freshman v. Atkins,
In
Jim Walter Homes, Inc. v. Saylors (In re Saylors),
The district court also concluded that, as a matter of law, Saylors did not propose his chapter 13 plan in good faith. Two *44 factors had a significant influence on the court in reaching this decision. The first was that Saylors filed his chapter 13 petition before the chapter 7 trustee filed his final report. This factor, however, is not dispositive on the issue of good faith. If it were, a debtor effectively would be barred as a matter of law from filing a chapter 13 petition during the period between the debtor’s receipt of a chapter 7 discharge and the filing of the final report by the chapter 7 trustee. The language of the Bankruptcy Code suggests no such rule. The Code provides that the ‘court shall confirm a [chapter 13] plan’ if the debtor meets certain conditions. 11 U.S.C. § 1325(a). The receipt of a prior chapter 7 discharge does not prevent the debtor from meeting any of the listed conditions. See § 1325(a)(l)-(6).
A per se rule barring the filing of a chapter 13 petition during the period at issue would also conflict with the purpose of Congress in adopting and designing chapter 13 plans. In Perry v. Commerce Loan Co.,383 U.S. 392 ,86 S.Ct. 852 ,15 L.Ed.2d 827 (1966), the Supreme Court held that the statutory provision barring a debtor from receiving a chapter 7 discharge within the first six years following the receipt of another discharge in bankruptcy does not apply to a chapter 13 petition filed after the receipt of a bankruptcy discharge. The Court reasoned that the application of the six-year bar to chapter 13 plans would prevent deserving debtors from utilizing the plans and thereby collide with the purpose of Congress in adopting and designing these plans. Id. at 399 and n. 6,86 S.Ct. at 857 and n. 6. We similarly are convinced that barring a debtor, as a matter of law, from filing a chapter 13 petition during the period at issue would collide with the purpose of Congress in adopting and designing chapter 13 plans. A chapter 7 trustee has the duty to ‘close the estate as expeditiously as is compatible with the best interests of parties in interest.’ 11 U.S.C. § 704(1). As a practical matter, however, the trustee often cannot fully close the estate until a considerable time has elapsed since the chapter 7 discharge. A rule barring all debtors from taking advantage of chapter 13 during this period could defeat Congress’s intent to the same extent as would a flat six-year prohibition.
Jim Walter Homes, Inc. v. Saylors (In re Saylors),
supra,
In
Helbock v. Strause (In re Strause),
In
Freshman,
the referee recommended that the debtor’s application for a discharge be denied. For some reason, the District Court never acted on the referee’s report. The matter remained dormant until 1922, when the debtor filed a second voluntary petition. He sought and obtained a favorable recommendation from a subsequent referee that the previously listed debts be discharged. The (District) Court sua sponte took judicial notice of debtor’s earlier application and “denied the second, in respect to the creditors included in the first petition; granted it as to the additional creditors (post-first petition); and, upon an inspection of the record, denied, by a separate order, the discharge sought under the original proceeding.” Id.,
[T]he same conclusion, which is, in effect, that the pendency of the first application precluded a consideration of the second in respect of the same debts. In this conclusion we concur. A proceeding in bankruptcy has for one of its objects the discharge of the bankrupt from his debts. In voluntary proceedings, as both of these proceedings were, that is the primary object. Denial of a discharge from the debts provable, or failure to apply for it within the statutory time bars an application under a second proceeding for discharge from the same debts_ But the objection that the issue is already pending, as that it has been adjudged, goes to the right of the bankrupt to maintain the later application, not to the question of the evidence or grounds upon which the relief may be granted if the application be maintainable. The refusal to discharge was not on the merits but upon the procedural ground that the matter could not properly be considered or adjudged except upon the prior application. This application had been reported upon adversely by the referee, was still pending, and, in ordinary course, could have been considered and acted upon by the court. To ignore it and make a second application, involving a new hearing, was an imposition upon and an abuse of the process of the court, if not a clear effort to circumvent the statute by enlarging the statutory limitation of time within which an application for a discharge must be made.
Freshman v. Atkins,
supra,
The Strause Court correctly noted, inter alia, the limited holding in Freshman was not that two cases cannot be pending at the same time, indeed:
First, although the language of Freshman v. Atkins suggests two proceedings cannot be pending at the same time, that is not the holding of that decision. To the contrary, it should be recalled that the new debts, scheduled in the second petition were discharged, notwithstanding the ‘pending’ first proceeding.
Strause,
supra,
In
In re Brown,
Freshman v. Atkins,269 U.S. 121 , 122, 123,46 S.Ct. 41 , [41, 41-42,]70 L.Ed. 193 (1925) is readily distinguishable. There the Supreme Court applied the ‘rule [analogous to res judicata] that the law will not tolerate two suits at the same time for the same cause’ in holding that ‘the pendency of the first application [for discharge of debts] precluded a consideration of the second in respect of the same debts.’ In the instant Chapter 13 case, the Debtor seeks entirely different relief from that which she has already obtained in the Chapter 7 case. She obtained a Chapter 7 discharge in the first *46 case. Now, in the second case, she seeks to cure deed of trust arrearages, as allowed under Chapter 13 (see 11 U.S.C. § 1322(b)(5)) but not Chapter 7; to pay tax debts in interest-free installments, as allowed under Chapter 13 (see 11 U.S.C. § 1322(a)(2)) but not Chapter 7; and to pay at least a portion of and obtain a Chapter 13 discharge as to new debts not covered by the prior Chapter 7 discharge.
In re Brown,
supra,
Thus, the following opinions may be whittled away from the majority position because of their incorrect reliance on
Freshman
and its progeny for their erroneous per se premise that a debtor may not simultaneously maintain two case under any set of circumstances: see e.g.,
Prudential Ins. Co of America v. Colony Square Co.,
Associates Financial Services Corp. v. Cowen (In the Matter of Cowen),
Additionally, the Cowen Court remarked that even if multiple filings were permitted, it could not be done “until at the earliest, after the granting of the discharge in the prior Chapter 7 proceeding.” Id.,
Because we hold it is not per se bad faith to file a Chapter 13 case after the receipt of a discharge in a still opened Chapter 7 case, we hold that under these circumstances, the good faith issue is not the filing of the petition. Rather, the issue is whether the debtor’s proposed Chapter 13 plan, under these circumstances, is in good faith. This issue is properly left to the confirmation hearing.
In
In re Robinson,
In
In re Tauscher,
*48 Over the years, there has been a truism in bankruptcy circles that a debtor cannot have two bankruptcy cases pending at the same time, and the court was itself concerned with the fact that Tauscher’s present chapter 13 petition was filed pri- or to the closing of the earlier chapter 7 case. Aside from the questions of good faith or possibly abuse of process, however, the court has been unable to conceive of any legal or practical reason, and none has been suggested to it, as to why he should be barred from so fil-ing_ Tauscher is in no wise (sic) involved in the preceding chapter 7 case anymore. That chapter 7 bankruptcy estate, as to which the trustee is attempting to sort out conflicting security interests of creditors, is totally distinct and separate from the estate in this chapter 13 case.
In re Tauscher,
supra,
In
In re Bumpass,
In
In re Ross,
[Djebtors must choose their remedy carefully and must then expect to shoulder the burdens as well as the benefits of the particular remedy selected. While the Court is unwilling to hold categorically that circumstances cannot exist which would make a Chapter 13 appropriate soon after a Chapter 7 discharge has been granted, confirmation of a plan under those circumstances will depend upon the nature of the obligations proposed to be treated in the Chapter Í3, the length of time between the filings, and the fore *49 seeability of the circumstances which arose after the Chapter 7 which prompted the Chapter 13 filing.
Id.,
Another case which supports our holding is
Perry v. Commerce Loan Co.,
In
Downey Savings And Loan Association v. Metz (In Matter of Metz),
*50 The Seventh Circuit has long recognized the distinction between the good faith required in the filing of a bankruptcy petition and the proposal of a plan.
In
Ravenot v. Rimgale (In re Rimgale),
(1) Does the proposed plan state Rim-gale’s [debtor’s] secured and unsecured debts accurately?
(2) Does it state Rimgale’s expenses accurately?
(3) Is the percentage of repayment of unsecured claims correct?
(4) If there are or have been deficiencies in the plan, do the inaccuracies amount to an attempt to mislead the bankruptcy court?
(5) Do the proposed payments indicate ‘a fundamental fairness in dealing with one's creditors,’ ...1
In re Rimgale,
supra,
In this connection, the bankruptcy court may wish to examine the timing of the bankruptcy filings, the proportion of the total unsecured debt that is represented by the Ravenot [creditor] judgment, and the equities of classifying together ordinary consumer debt and a judgment debt arising out of intentionally tortious conduct. ...
Id.,
In
Matter of Madison Hotel Associates,
Thus for purposes of determining good faith under section 1129(a)(3), as well as section 1325(a)(3), the important point of inquiry is the plan itself and whether such a plan will fairly achieve a result consistent with the objectives and purposes of the Bankruptcy Code. The district court’s decision failed to make this legal distinction between the good faith that is required to confirm a plan under section 1129(a)(3) and the good faith that has been established as a prerequisite to filing a Chapter 11 petition for reorganization.
Id.,
In
Matter of Smith,
In
In re Ligón,
*51 This Court believes that the Seventh Circuit would follow both Metz and Smith if confronted by the issue before the Court in the instant case. It would not hold that the debtor’s discharge of personal liability on the home mortgage in a Chapter 7 case per se permitted or prohibited the debtor’s subsequent use of Chapter 13 to force the secured lender to accept a cure and reinstatement of that mortgage in a Chapter 13 plan. Instead, it is reasonable to conclude that the Seventh Circuit would use the same approach to this problem that it used with the nondis-chargeable debt problem in Smith, i.e., instruct the bankruptcy court in determining whether to lift the stay, convert the case to one under Chapter 7, dismiss the case, or confirm the plan to examine not only the narrow question of whether what Ligón [debtor] proposes to do is permissible as a matter of law under the Bankruptcy Code, but also the totality of circumstances leading up to the filing of the petition and the proposal of the plan.
Id.,
We hold that on the entry of discharge in a debtor’s Chapter 7 case, the debtor may file a Chapter 13 petition prior to the closing of its Chapter 7 case. Additionally, and bearing in mind the distinction between good faith in the filing of the Chapter 13 petition and confirmation of the Chapter 13 plan, we hold Parduhn’s seeking of bankruptcy protection under the aforementioned circumstance does not constitute per se bad faith filing of the Chapter 13 petition. We save for the confirmation hearing the issue of whether or not Parduhn’s action in seeking relief under Chapter 13 after receipt of discharge from the “technically viable” Chapter 7 case affects the good faith requirement in proposing a Chapter 13 plan.
We hold further that the “single estate rule” prevents a debtor from filing a Chapter 13 petition before the receipt of a discharge from a simultaneous Chapter 7 case.
Notes
Sitting by special designation.
. We have jurisdiction over these matters under 28 U.S.C. § 1334(b) and the General Order of Reference to this Court, No. 45. These proceedings are core matters under 28 U.S.C. § 157(b). This Memorandum Decision constitutes findings of fact and conclusions of law under F.R. Civ.P. 52 as made applicable by Rules of Practice and Procedure in Bankruptcy Rule 7052.
. At a pre-hearing the day before the rulings on these motions, we had indicated, regarding the Parduhn case, to the U.S. Attorney that we would deny the Internal Revenue Service’s motion on the same issue. Rather than create what the Asst. U.S. Attorney perceived as “bad precedent," the Internal Revenue Service withdrew its motion to dismiss. The Chapter 13 Trustee in these cases, and others, indicated, however, that he had several similar motions to dismiss and requested we rule on his motion to dismiss. He also asked that we consolidate the Parduhn case motion with Kosenka because the issue in these two Chapter 13 cases was quite focused. We granted the request.
.This issue is known in bankruptcy jargon as one of several variations of the “Chapter 20” case.
. 11 U.S.C. § 706, Conversion, provides:
(a) The debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1307, or 1208 of this title. Any waiver of the right to convert a case under this subsection is unenforceable.
(b) On request of a party in interest and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 11 of this title at any time.
(c) The court may not convert a case under this chapter to a case under chapter 12 or 13 of this title unless the debtor requests such a conversion.
(d) Notwithstanding any other provision of this section, a case may not be converted to a case under another chapter of this title unless the debtor may be a debtor under such chapter.
. 11 U.S.C. § 1112(a), Conversion or dismissal, provides:
(a)The debtor may convert a case under this chapter to a case under chapter 7 of this title unless—
(1) the debtor is not a debtor in possession;
(2) the case originally was commenced as an involuntary case under this chapter; or
(3) the case was converted to a case under this chapter other than on the debtor’s request.
. 11 U.S.C. § 1208(a), Conversion or dismissal, provides:
(a) The debtor may convert a case under this chapter to a case under Chapter 7 of this title at any time. Any waiver of the right to convert under this subsection is unenforceable.
. 11 U.S.C. § 1307(a), Conversion or dismissal, provides:
(a) The debtor may convert a case under this chapter to a case under chapter 7 of this title at any time. Any waiver of the right to convert under this subsection is unenforceable.
. Rule 1015, Consolidation or Joint Administration of Cases Pending in Same Court, provides:
(a) Cases Involving Same Debtor. If two or more petitions are pending in the same court by or against the same debtor, the court may order consolidation of the cases.
(b) Cases Involving Two or More Related Debtors. If a joint petition or two or more petitions are pending in the same court by or against (1) a husband and wife, or (2) a partnership and one or more of its general partners, or (3) two or more general partners, or (4) a debt- or and an affiliate, the court may order a joint administration of the estates. Prior to entering an order the court shall give consideration to protecting creditors of different estates against potential conflicts of interest. An order directing joint administration of individual cases of a husband and wife shall, if one spouse has elected the exemptions under § 522(b)(1) of the Code and the other has elected the exemptions under § 522(b)(2), fix a reasonable time within which either may amend the election so that both shall have elected the same exemptions. The order shall notify the debtors that unless they elect the same exemptions within the time fixed by the court, they will be deemed to have elected the exemptions provided by § 522(b)(1).
(c) Expediting and Protective Orders. When an order for consolidation or joint administration of a joint case or two or more cases is entered pursuant to this rule, while protecting the rights of the parties under the Code, the court may enter orders as may tend to avoid unnecessary costs and delay.
. We are aware of our holding in
In re McKinstry,
. See e.g., “Judicial estoppel." Judicial estop-pel applies to preclude a party from assuming a position in a legal proceeding inconsistent with one previously asserted. Judicial estoppel looks to the connection between the litigant and the judicial system.
Oneida Motor Freight, Inc. v.
*45
United Jersey Bank,
. The debtors did argue that they listed only secured debts because they felt their unsecured creditors had been discharged in their Chapter 7 proceeding. The Heywood. Court seems to indicate that the failure to list unsecured debts is bad faith.
. The Metz Opinion uses the word "plan" as opposed to petition and we are unable to determine whether the Court meant petition.
. But see, fn. 9.
. The facts of this case are distinguishable from In re McKinstry, fn. 9, supra, because here the debtor was unable to reach a reaffirmation agreement with its creditors, whereas in McKin-stry this fact was not made known to us.