IN RE BASSE, (Bankr.D.Wyo. 2001)

PETER J. McNIFF, Bankruptcy Judge.

On October 31, 2001, this case came before the court for a hearing on the motion to dismiss filed by the Community First Bank of Casper (CFB). The CFB was represented by John C. Patton, and the debtor by Georg Jensen.

The motion is brought pursuant to 11 U.S.C. § 1307(c) for cause, specifically the debtor's ineligibility for chapter 13 relief under § 109(g)(1). Under that section,

no individual . . . may be a debtor under this title who has been a debtor in a case pending under this title at any time in the preceding 180 days if the case was dismissed by the court for willful failure of the debtor to abide by orders of the court[.]

The court agrees with the CFB that the debtor's failure to abide by an order of the court was willful.

Dorothy Basse filed a chapter 13 case on May 14, 1999. During the pendency of that case, she was seriously in default on two occasions before a plan was confirmed. On April 10, 2000, the court confirmed the debtor's chapter 13 plan, but by September 2000 she was again in default.

On February 26, 2001, Ms. Basse filed a plan modification providing for an abatement with the next payment due on March 20, 2001. On March 1, 2001, the court held a hearing on the trustee's motion to dismiss at which the trustee stated the proposed modification filed in February was not confirmable. The court gave the debtor ten days from March 1, 2001 to become current or to file a modified plan with requisite supporting documentation, and to provide requested financial information to the trustee.

The debtor filed a plan on March 9, 2001, as ordered. That plan also provided for the next payment due date of March 20, 2001. The debtor did not provide the information requested to the trustee as ordered. On March 15, 2001, at the request of the debtor, the court granted the debtor until March 20, 2001 to file amended schedules.

Nothing further occurred in the case until the court reviewed the file in May 2001. At the time, the court determined that the debtor had not made her payment due for April 2001, and therefore, the pending plan could not be confirmed. Nor had she provided supporting documentation as ordered. Consequently, the court dismissed the debtor's case. In the meantime, Ms. Basse had filed her year 1999 and 2000 federal income tax returns. On May 29, 2001, the United States Treasury issued two tax refund checks for those tax years to the debtor in care of the chapter 13 trustee. The combined refunds totaled $3,544.76. Because the case was dismissed, the checks were negotiated to the debtor. She used the funds to pay off an arrearage on the mortgage secured by her residence and to purchase automobile insurance.

On July 12, 2001, Ms. Basse filed this chapter 13 case. Her statement of financial affairs does not reflect the payments to the arrearage on her mortgage.

The CFB contends that the debtor's failure to provide the required information to the chapter 13 trustee, and to file a modified chapter 13 plan or become current under the confirmed plan, were all willful violations of the court's March 1, 2001 order. The debtor contends the terms of the order were impossible, that she could not become current and could not file a plan modification that contained a payment schedule she could afford.

Willful conduct under § 109(g) has been defined as "intentional, knowing and voluntary" conduct. In re Campbell, 266 B.R. 709, 712 (Bankr.W.D.Ark. 2001). In the court's view, the debtor's failure to provide the requested information to the trustee and to take action to cure her default or support the modified plan was deliberate and voluntary. No action was taken by the debtor during the months of March and April. During that time she knew that: the proposed modification was not confirmable; she was soon to receive a large income tax refund; there was a postpetition claim which needed to be addressed; and she did not have the financial means to make payments under the plan, insure her vehicle, or pay the arrearage on her mortgage. Instead of voluntarily converting or dismissing her case, the debtor deliberately waited for the court to dismiss her case, securing for herself additional delay to the creditors.

The court understands the debtor was working very hard to make ends meet and that she was incapable of paying the amounts necessary under the plan. The issue however is whether her failure to take action as ordered in her previous case was intentional, which it was. The debtor's conduct was calculated to obtain a dismissal of her case, but only after obtaining as much of a delay as possible.

Although not pleaded by the movant, good faith issues also are apparent here. Since May 1999, creditor action has been subject to an automatic stay in one case or another. During that time, the amount returned to those creditors was not large and the debtor abated more payments than she made. With the tax refunds that were to be paid into her plan, the debtor instead accomplished the purpose of the first case, to save her home, but at the expense of all creditors except the mortgagee.

A dismissal of this case due to ineligibility under § 109(g)(1) may seem harsh, but this case was filed when the debtor was ineligible for relief. Moreover, the court is convinced that this debtor should be seeking chapter 7 relief instead.

The CFB also contends the debtor should be barred from filing another chapter 13 case for a reasonable period of time. The court agrees. Dismissal of this case will not effect a new bar to filing without action by the court, to the detriment of the debtor's creditors. In re Roland, 224 B.R. 401, 404 (Bankr.E.D.Mo. 1997) (debtor enjoined when case dismissed under § 109(g)(2)). Therefore, the court will bar the debtor from filing a chapter 11 or another chapter 13 case for 180 days from the date of this dismissal.

IT IS, THEREFORE, ORDERED that the motion of the Community First Bank is granted and this case is dismissed; and

FURTHER ORDERED that the debtor shall have ten days from the date of this order in which to convert her case to a case under chapter 7, failing which the dismissal will be effective; and

FINALLY ORDERED that Ms. Basse is hereby barred from filing a chapter 11 or chapter 13 case for 180 days from the date of this order.