OPINION
JOHN J. THOMAS, Bankruptcy Judge.
Donna M. Kerschner (Debtor) filed for bankruptcy under Chapter 13 on January 6, 1998. The matter presently before this Court is a Motion of Darlene Andrews (Creditor), Executrix of the Estate of Betty McGowan, to Dismiss. Andrews asserts that Debtor’s filing was made in bad faith and should be dismissed because it was filed to defeat the Orphans’ Court Order and without any reorganization purpose.
The Third Circuit held that “lack of good faith in [a Chapter 13] filing is sufficient cause for dismissal under section 1307(c).”
In re Lilley,
91 F.3d 491, 496 (3d Cir.1996). It is the discretion of the bankruptcy court to determine good faith on a case-by-case basis looking at the totality of the circumstances.
Id.
Some factors that may be taken into consideration to determine good faith are:
the nature of the debt ...; the timing of the petition; how the debt arose; the debtor’s motive in filing the petition; how the debtor’s actions affected creditors; the debtor’s treatment of creditors both before and after the petition was filed; and whether the debtor has been forthcoming with the bankruptcy court and the creditors.
Id.
(quoting
In re Love,
957 F.2d 1350, 1357 (7th Cir.1992)). Primarily, an analysis of good faith allows the bankruptcy court to determine “ ‘whether or not under the circumstances of the case there has been an abuse of the provisions, purpose, or spirit of [the Chapter].’ ”
In re Love,
957 F.2d 1350, 1357 (7th Cir.1992) (quoting
In re Rimgale,
669 F.2d 426, 431 (7th Cir.1982)).
“[T]he nature of the debt”
The debt is in the nature of a decision by Judge Richard W. Webb, Orphans’ Court Division of the Court of Common Pleas of Carbon County, ordering the return of cash and personal property that Debtor acquired prior to and after the death of Betty McGowan.
In re McGowan,
18 Fiduc.Rep.2d 13, No. 96-9173, Court of Common Pleas of Carbon County, Pennsylvania, Orphans’ Court Division (Sept. 3, 1997). The Orphans’ Court held that Debtor wrongfully converted this cash and personal property of Betty McGowan to herself and third-parties.
Id.
at 5-9.
“[H]ow the debt arose”
The debt arose pursuant to the Orphans’ Court Decree Nisi issued on September 3, 1997, where the Debtor was ordered to:
1) file an accounting of all transactions conducted for Decedent [Betty McGowan] pursuant to or since the existence of the Power of Attorney, including all transfers of Decedent’s property;
2) return to the Estate Decedent’s cash and personal property acquired pursuant to or since the existence of the Power of Attorney,
3) reimburse the Estate for lost interest at the legal rate and for penalties charged by First Valley Bank for the closing of Decedent’s accounts in the amount of $352.75; and
4) pay costs related to the filing and hearing of this Petition.
Id.
at 9. The Decree Nisi was finalized on September 25,1997.
“[T]he debtor’s treatment of creditors both before and after the petition was filed”
Prior to filing under Chapter 13 and subsequent to the Orphans’ Court Order of September 3, 1997, Debtor acted with total disregard to Creditor’s interest in the Estate money by purchasing goods for herself and third-parties. For the purpose of applying the
Lilley
factors, this Court is only concerned with the Debtor’s purchases in willful disobedience of the Or
phans’ Court Order
relating to Darlene Andrews, Executrix of the Estate of Betty McGowan (Creditor).
I find the following purchases are material in the determination of bad faith: Debtor paid numerous tax bills on September 11, 1997, September 15, 1997, and September 16, 1997; purchased eye glasses for herself on October 6, 1997; purchased a 1996 Polaris Magnum 4x4 all terrain vehicle for her 13 year old grandson on October 15, 1997; and purchased a chocolate lab puppy for her grandson that resided with her in December of 1997. (Deposition of August 17, 1998 at 45-52.) These purchases subsequent to the September 3, 1997 Orphans’ Court Order are material to my weighing of the
Lilley
factors because it was at this point that the debt arose. The Debtor, being aware of the Orphans’ Court Order, had the resources to satisfy part of the debt with remaining Estate money, but continued to wrongfully spend the Estate money.
The Debtor also made numerous purchases with the decedent’s money prior to the September 3, 1997 Orphans’ Court Order. Even though these purchases were held to be wrongful by the Orphans’ Court, they are not material to my determination of whether the Debtor filed in bad faith. When the Debtor made these purchases she was under the belief that the money was hers.
It is bad enough that the Debtor disobeyed the Orphans’ Court Order, but the Debtor acted while contemplating bankruptcy.
This disobedience combined with
the continued spending of the remaining estate money and the contemplation of bankruptcy is consistent with a finding of bad faith.
“[T]he timing of the petition”
The Orphans’ Court issued a Decree Nisi on September 3, 1997, which was finalized on September 25, 1997. The Debtor intentionally failed to satisfy this Court Order. On November 28, 1997, Creditor filed a motion to hold Debtor in contempt for Debtor’s failure to obey the Order. As a result, the Orphans’ Court scheduled contempt proceedings for January 7, 1998. The Debtor responded on January 6, 1998, by filing under Chapter 13. Filing for relief the day before the contempt hearing is strong evidence that the Debtor filed purely to defeat state court litigation, thus violating the “spirit of the Chapter.”
In re Chinichian,
784 F.2d 1440, 1445 (9th Cir.1986). However, the mere act of filing the day prior to the state court hearing in itself does not amount to bad faith warranting the dismissal of the Debtor’s Chapter 13 petition. It is important to also take into consideration the Debtor’s motive behind filing for relief with the timing of the petition.
“[T]he debtor’s motive in filing the petition”
The Debtor, being aware of the consequences of disobedience,
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OPINION
JOHN J. THOMAS, Bankruptcy Judge.
Donna M. Kerschner (Debtor) filed for bankruptcy under Chapter 13 on January 6, 1998. The matter presently before this Court is a Motion of Darlene Andrews (Creditor), Executrix of the Estate of Betty McGowan, to Dismiss. Andrews asserts that Debtor’s filing was made in bad faith and should be dismissed because it was filed to defeat the Orphans’ Court Order and without any reorganization purpose.
The Third Circuit held that “lack of good faith in [a Chapter 13] filing is sufficient cause for dismissal under section 1307(c).”
In re Lilley,
91 F.3d 491, 496 (3d Cir.1996). It is the discretion of the bankruptcy court to determine good faith on a case-by-case basis looking at the totality of the circumstances.
Id.
Some factors that may be taken into consideration to determine good faith are:
the nature of the debt ...; the timing of the petition; how the debt arose; the debtor’s motive in filing the petition; how the debtor’s actions affected creditors; the debtor’s treatment of creditors both before and after the petition was filed; and whether the debtor has been forthcoming with the bankruptcy court and the creditors.
Id.
(quoting
In re Love,
957 F.2d 1350, 1357 (7th Cir.1992)). Primarily, an analysis of good faith allows the bankruptcy court to determine “ ‘whether or not under the circumstances of the case there has been an abuse of the provisions, purpose, or spirit of [the Chapter].’ ”
In re Love,
957 F.2d 1350, 1357 (7th Cir.1992) (quoting
In re Rimgale,
669 F.2d 426, 431 (7th Cir.1982)).
“[T]he nature of the debt”
The debt is in the nature of a decision by Judge Richard W. Webb, Orphans’ Court Division of the Court of Common Pleas of Carbon County, ordering the return of cash and personal property that Debtor acquired prior to and after the death of Betty McGowan.
In re McGowan,
18 Fiduc.Rep.2d 13, No. 96-9173, Court of Common Pleas of Carbon County, Pennsylvania, Orphans’ Court Division (Sept. 3, 1997). The Orphans’ Court held that Debtor wrongfully converted this cash and personal property of Betty McGowan to herself and third-parties.
Id.
at 5-9.
“[H]ow the debt arose”
The debt arose pursuant to the Orphans’ Court Decree Nisi issued on September 3, 1997, where the Debtor was ordered to:
1) file an accounting of all transactions conducted for Decedent [Betty McGowan] pursuant to or since the existence of the Power of Attorney, including all transfers of Decedent’s property;
2) return to the Estate Decedent’s cash and personal property acquired pursuant to or since the existence of the Power of Attorney,
3) reimburse the Estate for lost interest at the legal rate and for penalties charged by First Valley Bank for the closing of Decedent’s accounts in the amount of $352.75; and
4) pay costs related to the filing and hearing of this Petition.
Id.
at 9. The Decree Nisi was finalized on September 25,1997.
“[T]he debtor’s treatment of creditors both before and after the petition was filed”
Prior to filing under Chapter 13 and subsequent to the Orphans’ Court Order of September 3, 1997, Debtor acted with total disregard to Creditor’s interest in the Estate money by purchasing goods for herself and third-parties. For the purpose of applying the
Lilley
factors, this Court is only concerned with the Debtor’s purchases in willful disobedience of the Or
phans’ Court Order
relating to Darlene Andrews, Executrix of the Estate of Betty McGowan (Creditor).
I find the following purchases are material in the determination of bad faith: Debtor paid numerous tax bills on September 11, 1997, September 15, 1997, and September 16, 1997; purchased eye glasses for herself on October 6, 1997; purchased a 1996 Polaris Magnum 4x4 all terrain vehicle for her 13 year old grandson on October 15, 1997; and purchased a chocolate lab puppy for her grandson that resided with her in December of 1997. (Deposition of August 17, 1998 at 45-52.) These purchases subsequent to the September 3, 1997 Orphans’ Court Order are material to my weighing of the
Lilley
factors because it was at this point that the debt arose. The Debtor, being aware of the Orphans’ Court Order, had the resources to satisfy part of the debt with remaining Estate money, but continued to wrongfully spend the Estate money.
The Debtor also made numerous purchases with the decedent’s money prior to the September 3, 1997 Orphans’ Court Order. Even though these purchases were held to be wrongful by the Orphans’ Court, they are not material to my determination of whether the Debtor filed in bad faith. When the Debtor made these purchases she was under the belief that the money was hers.
It is bad enough that the Debtor disobeyed the Orphans’ Court Order, but the Debtor acted while contemplating bankruptcy.
This disobedience combined with
the continued spending of the remaining estate money and the contemplation of bankruptcy is consistent with a finding of bad faith.
“[T]he timing of the petition”
The Orphans’ Court issued a Decree Nisi on September 3, 1997, which was finalized on September 25, 1997. The Debtor intentionally failed to satisfy this Court Order. On November 28, 1997, Creditor filed a motion to hold Debtor in contempt for Debtor’s failure to obey the Order. As a result, the Orphans’ Court scheduled contempt proceedings for January 7, 1998. The Debtor responded on January 6, 1998, by filing under Chapter 13. Filing for relief the day before the contempt hearing is strong evidence that the Debtor filed purely to defeat state court litigation, thus violating the “spirit of the Chapter.”
In re Chinichian,
784 F.2d 1440, 1445 (9th Cir.1986). However, the mere act of filing the day prior to the state court hearing in itself does not amount to bad faith warranting the dismissal of the Debtor’s Chapter 13 petition. It is important to also take into consideration the Debtor’s motive behind filing for relief with the timing of the petition.
“[T]he debtor’s motive in filing the petition”
The Debtor, being aware of the consequences of disobedience,
deliberately chose not to comply with the Orphans’ Court Decree Nisi or Final Order and continued to spend money to which she was not entitled. (Deposition of August 17, 1998 at 99-100.) As mentioned earlier when analyzing the Debtor’s treatment of creditors before and after the petition, the Debtor willfully continued to spend estate money that increased her debt while contemplating bankruptcy.
“[H]ow the debtor’s actions affected creditors”
Apart from not receiving money that is rightfully the property of the estate of Betty McGowan, Creditor was deprived of interest on the money for approximately 2years, suffered a decrease in the amount of money as a result of early withdrawal penalties, and also forced to pay costs relating to the defense of the bankruptcy.
In re McGowan,
18 Fiduc.Rep.2d 13, No. 96-9173 (Sept. 3, 1997).
“[W]hether the debtor has been forthcoming with the bankruptcy court and the creditors”
There were three omissions of assets on Debtor’s initial schedules that would suggest that the Debtor was not forthcoming to this Court and creditors. The Debtor did not list approximately two acres of property in Lehighton at Highland Hills, rental income from her son, and a life insurance policy. (Deposition of August 17, 1998 at 85-97.) There is no evidence to support that these omissions were more than a mere oversight, thus, it is not material in my determination of bad faith.
Taking into consideration the totality of the circumstances and weighing the
Lilley
factors, it is for this Court to decide whether or not the Debtor filed in bad faith. “The overriding purpose of the Bankruptcy Code is to relieve debtors from the weight of oppressive indebtedness and provide them with a fresh start.”
In re Cohn,
54 F.3d 1108, 1113 (3d Cir.1995). Furthermore, “a bad faith attempt
to use and abuse Chapter 13 for a greedy and unworthy purpose” should not be tolerated.
In re Waldron, 785
F.2d 936, 941 (11th Cir.1986). “Bankruptcy is a remedy based in equity.”
In re Love,
957 F.2d 1350, 1358-59 (7th Cir.1992). “As such, the good faith standard prevents debtors from manipulating the Code for wrongful purposes.”
Id.
Applying and weighing the factors taken from
Lilley,
this Court finds that the Debtor filed for relief under Chapter 13 of the Bankruptcy Code in bad faith. It is based on this finding of bad faith that the Motion of Darlene Andrews, Executrix of the Estate of Betty McGowan, to Dismiss is granted.