Determining Whether A Debtor Filed His/her Petition In Good Faith

May 17, 2010 - PRLog -- The factors are similar to those utilized in determining whether a debtor filed his petition in good faith.
The Tests
Totality of the circumstances is the governing standard in this circuit to see if the debtor acted equitably in proposing the plan.
To determine whether a debtor has proposed his plan in good faith, the court must satisfy itself whether
(1) the debtor has misrepresented facts in the plan
(2) unfairly manipulated the Code or
(3) otherwise proposed his plan in some inequitable manner.
All relevant facts, not just how substantial the payment may be, should be considered. This standard resembles a fluffy pillow. This standard means what ever a bankruptcy court wants it to mean.
Again, there is yet another test with various factors to consider whether a plan was proposed in good faith. The Eleventh Circuit enunciated the following non-exclusive factors for courts to consider in determining whether, under the totality of the circumstances, a Chapter 13 plan is proposed in good faith.
(1) amount of the debtor’s income from all sources;
(2) living expenses of the debtor and dependents;
(3) amount of attorney fees;
(4) probable or expected duration of the debtor’s Chapter 13 plan;
(5) motivations of the debtor and his sincerity in seeking relief under provisions of Chapter 13;
(6) the debtor’s degree of effort;
(7) the debtor’s ability to earn and likelihood of fluctuation in his earnings;
(8) special circumstances such as inordinate medical expense;
(9) frequency with which the debtor has sought relief under the Bankruptcy Reform Act and its predecessors;
(10) circumstances under which the debtor has contracted his debts and his demonstrated bona fides, or lack of same, in dealings with his creditors;
(11) burden which plan’s administration would place on trustee;
(12) any exceptional circumstances in the case;
(13) the type of debt and whether it would be non-dischargeable in chapter 7;
and
(14) the accuracy of the plan’s statements of debts and expenses and whether any inaccuracies are an attempt to mislead the court.
Please note that while Bankruptcy Loans are not dischargeable under a Chapter 7 Bankruptcy, that the Chapter 13 Bankruptcy Filing can be made so as to accommodate a lower payment each month.

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I have been a licensed attorney since 1992. I have passed a rigorous examination and extensive experience requirements by the State Bar of California, Board of Legal Specialization. My firm helps in preparing many different types of bankruptcy petitions. They will be prepared and filed in the Bankruptcy Court where the bankruptcy records will be stored for many years.