This matter is before the Court on a Motion to Dismiss filed on August 20, 1991 by L & N Federal Credit Union ("L & N"), a creditor of the debtor. The debtor filed his Objection to Motion on September 4, 1991. The issue raised by L & N's Motion to Dismiss is whether the alleged ability to fund a Chapter 13 plan constitutes "bad faith" pursuant to 11 U.S.C. '707(a).

L & N's Motion to Dismiss is based on the contention that the debtor is able to fund a 100% Chapter 13 plan and that therefore his Chapter 7 petition does not satisfy the "good faith" requirements of the Code. L & N alleges that granting Chapter 7 relief in this case would be a "substantial abuse". It does not plead under any Code section, although dismissals are treated in '707. Assuming that it is proceeding pursuant to '707, it attempts to employ the '707(b) concept of "substantial abuse" along with the concept that "for cause" in '707(a) includes the absence of good faith in something of a scatter-gun argument. The debtor points out that a Motion to Dismiss must be made by the U.S. Trustee or by the Court, sua sponte.

If L & N intended to proceed under '707(a), it would be required to demonstrate that the ability to fund a Chapter 13 plan constitutes lack of good faith in the filing of a Chapter 7 petition. A recent 6th Circuit case, In re Zick, 931 F.2d 1124 (6th Cir. 1991), found that lack of good faith is a valid basis of a decision by the bankruptcy court to dismiss a Chapter 7 case "for cause". The Court went on to say, however, that

In In re Frisch, 76 B.R. 801 (Bkrtcy.D.Colo. 1987), the court did consider the question of whether ability to fund a Chapter 13 plan constitutes "bad faith" under '707(a). Therein the court stated

Another court which considered the ability to fund a Chapter 13 plan as a basis for dismissal of a Chapter 7 case determined on its own motion that granting relief under Chapter 7 would be a substantial abuse pursuant to '707(b). See In re Grant, 51 B.R. 385 (Bkrtcy.N.D.Ohio 1985). In this case, the court's decision was also based on its finding that the debtors, whose personal spending habits appeared excessive, had not "demonstrated any resolve to tighten their belts, or to incur debts with a clear intent to pay their creditors their just due." At 394.

An excellent discussion of "good faith" as a general jurisdictional requirement for cases under Chapter 7 is found in In re Jones, 114 B.R. 917, 924 et seq. (Bkrtcy.N.D.Ohio 1990). The question raised therein as to whether lack of good faith is an adequate cause for dismissal has, of course, been answered by In re Zick, supra. The Jones court considered the debtor's ability to repay his debts as a element of good faith. It eventually came to the conclusion that this was one of several factors, including fraud and misconduct on the part of the debtor, that supported a finding of lack of good faith. The court dismissed the debtor's Chapter 7 petition pursuant to '707(a). At 926. The legislative history of '707(a) indicates, however, that the ability to repay debts, in and of itself, is not adequate cause for dismissal:

In the case at bar, L & N has not demonstrated any egregious behavior on the part of the debtor. It makes no allegations of fraud or misconduct, and presents no evidence of a lavish lifestyle or excessive spending habits on the part of the debtor. Its only argument is that the debtor now has excess income with which to fund a Chapter 13 plan. In the absence of any such evidence, L & N appears to be asking this Court to bypass the prohibition addressed to parties in interest in '707(b), hoping that the Court will pick and choose among '707(a) and '707(b) requirements and come up with a combination that will result in a dismissal.