In re Hatem

Betty Hatem (debtor) was involved in a legal dispute in state circuit court with her mother, Elizabeth Kennedy, regarding ownership of real estate property. The circuit court declared that Hatem and Kennedy each owned one-half interest in the property, established that the property’s value was $410,000, and ordered the sale of the property. Kennedy and Hatem had 30 days to submit bids on the property. One week before the bid period ended, Hatem filed for Chapter 13 bankruptcy. Hatem’s filing did not disclose Kennedy’s one-half ownership interest in the property. Hatem listed the value of her interest in the property as $205,000 and erroneously reported that Kennedy held a $210,000 secured lien on the property. Hatem accurately reported that Regions Bank held a $54,623 mortgage on the property and that Hatem’s total assets equaled $215,403. The Chapter 13 plan proposed no payments to unsecured creditors on their claims totaling $51,243. Subsequently, Kennedy filed a motion for relief from the automatic stay and to dismiss Hatem’s Chapter 13 filing, asserting that Hatem did not propose a Chapter 13 plan in good faith. The bankruptcy court found that the Chapter 13 plan had been filed in bad faith and dismissed the bankruptcy case. Hatem appealed. In her brief to the United States District Court for the Southern District of Alabama , Hatem stated that she filed her Chapter 13 case partly to prevent a forced sale of the property.