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In re Crager

United States Court of Appeals for the Fifth Circuit
691 F.3d 671 (2012)


Patricia Crager (defendant) was unemployed. Crager’s main source of income was $1,060 per month in Social Security payments. Crager’s residence was valued at $55,000 and had a $40,000 mortgage, and she also had $7,000 in credit-card debt. Crager filed for chapter 13 bankruptcy. Crager chose to file for chapter 13 bankruptcy rather than chapter 7 bankruptcy, because she was concerned that she might have to file for bankruptcy again in the future and believed that filing for chapter 7 would prevent her from filing for bankruptcy again for a longer period. The bankruptcy trustee objected to the confirmation of Crager’s plan and argued that the petition and plan were not made in good faith. The trustee also argued that the attorney’s fees were unreasonable, as they amounted to almost the full amount paid to the trustee. The bankruptcy court overruled the trustee’s objection, approved the chapter 13 plan, and awarded $2,800 in attorney’s fees to Crager’s attorney. The trustee appealed, and the district court reversed the confirmation of the plan and ordered the bankruptcy court to find on remand that the plan was filed in bad faith. Crager appealed.

Rule of Law


Holding and Reasoning (Higginbotham, J.)

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