United States Court of Appeals
                                                                      Fifth Circuit
                                                                    F I L E D
                IN THE UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT                       March 29, 2007

                                                                 Charles R. Fulbruge III
                               No. 06-30343                              Clerk



In the matter of: JAMES HENRY STANLEY; DOROTHY JEAN WICKER
STANLEY,
                                                       Debtor.

KATHLEEN SUGGS,

                                                Appellee-Cross-Appellant,
versus


JAMES HENRY STANLEY AND DOROTHY JEAN WICKER STANLEY,

                                              Appellants-Cross-Appellees.



         Appeals from the United States District Court
             for the Western District of Louisiana
                (No. 5:04cv0059; No. 5:04cv0060)



Before GARWOOD, WIENER, and CLEMENT, Circuit Judges.

PER CURIAM:*

     Debtors-Appellants-Cross-Appellees James Henry Stanley and

Dorothy Jean Wicker Stanley filed a petition for bankruptcy under

Chapter 13     of   the   United   States   Bankruptcy   Code.     Creditor-

Appellee-Cross-Appellant Kathleen Suggs, an unsecured creditor of

the Stanleys, objected to the confirmation of the Chapter 13 plan

and moved to convert it to one under Chapter 7, asserting that the


     *
       Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
Stanley’s did not file the petition in good faith, as required by

11 U.S.C. § 1325(a)(3). The bankruptcy court denied Suggs’s motion

after finding that the Stanleys had filed the petition in good

faith.     On appeal, however, the district court reversed, holding

that the bankruptcy court clearly erred in finding good faith. The

Stanleys    appeal,       asking   us   to    reinstate     the    ruling      of   the

bankruptcy court; Suggs cross-appeals, supporting the ruling of the

district court but contending that the Stanleys’ bankruptcy action

should    be     dismissed     rather   than     converted    to     a    Chapter     7

proceeding.       We reverse the ruling of the district court, affirm

the   ruling     of    the   bankruptcy      court,   and   remand       for   further

proceedings in that court.

                             I. FACTS & PROCEEDINGS

A.    The Judgment

      Suggs was the long-time companion of Gilbert Wicker, a brother

of Dorothy Stanley.          In July 1999, Suggs found Wicker dead in his

house in Little Rock, Arkansas.              After a brief investigation, the

Little Rock police department determined that the cause of death

was suicide.1         In the week following Wicker’s death, Mrs. Stanley

and her sister challenged the determination that the cause of

Wicker’s death was suicide, suggesting that Suggs may have played

a role in his death.         As a result, Suggs brought a diversity action

against the decedent’s sisters in the Eastern District of Arkansas,

claiming that they had defamed her.               The jury found in favor of


      1
               Suggs v. Stanley, 

, 675-76 (8th Cir. 2003).
Suggs and awarded her $50,000 in damages.              The sisters appealed,

and the Eighth Circuit affirmed with one dissent.2

B.   The Bankruptcy Petition and Decision

     On April 15, 2003, the same day that the judgment against Mrs.

Stanley became final and before Suggs could file her judgment in

the public records and thus become a secured creditor, the Stanleys

filed a petition for relief under Chapter 13 of the Bankruptcy

Code.     The next month, Suggs filed an objection to the proposed

wage earners’ plan on the grounds that it was a “continuation of

the malice of Dorothy Stanley against Kathleen Suggs.”                   Suggs

asserted that the plan had not been proposed in good faith, so that

confirmation should be denied pursuant to 11 U.S.C. § 1325(a)(3).

Suggs also filed a motion to have the Stanleys’ Chapter 13 case

converted to one under Chapter 7.

     Suggs asserted that the Stanleys’ lack of good faith was

evident from: (1) an earlier filing of a Chapter 7 petition; (2)

the timing of the filing of the petition; (3) their attempt to

discharge    a   debt   that,    according      to    Suggs,   would   not   be

dischargeable in a Chapter 7 bankruptcy, because it arose from a

willful     or   malicious      injury;   (4)        the   Stanleys’   alleged

determination not to pay the debt; (5) Mrs. Stanley’s voluntarily

quitting her job the month following the entry of the judgment in

the district court in Arkansas; (6) the original plan’s provision

for repayment into a retirement account; (7) the Stanleys’ failure


     2
            

682.
to   comply    with    Suggs’s    requests    for    documents;      (8)    false    or

undisclosed information on a loan application filed by the Stanleys

two months before the bankruptcy filing; (9) the denuding of the

Stanleys’ home equity by obtaining a mortgage loan; and (10) the

plan’s preferential treatment of some of the Stanleys’ unsecured

creditors over Suggs.

       After conducting a hearing, the bankruptcy court confirmed the

plan and denied Suggs’s motion to convert, finding that the plan

had been proposed in good faith.              In reaching its conclusion of

good   faith,    the     bankruptcy    court       addressed   each    of    Suggs’s

proffered indicia of a lack of good faith, rejecting each in turn

with reasons.     In sum, the bankruptcy court held that the Stanleys

filed their petition because “they had no place else they could go

and continue to live, pay their bills, and . . . support their

dependents.”      The bankruptcy court entered an order overruling

Suggs’s objection and denying the motion to convert, which Suggs

timely appealed to the district court.                 Following entry of this

order, the bankruptcy court allowed modification of the Stanleys’

plan, and Suggs objected to the modified plan for substantially the

same reasons that she had objected to the original plan.                            The

modified plan was confirmed on December 2, 2003.                      Suggs again

timely appealed to the district court.

       The    district    court     consolidated     the   appeals,        eventually

reversing the bankruptcy court.          The district court concluded that

the bankruptcy        court   had    failed   to    consider   the    totality       of
circumstances and remanded the matter to the bankruptcy court for

further proceedings.      The Stanleys appeal the district court’s

ruling.     Suggs   cross-appeals,   asserting   that   the   Stanleys’

bankruptcy petition should be dismissed rather than converted to a

Chapter 7 proceeding.

                            II.   ANALYSIS

A.   Standard of Review

     In reviewing cases originating in bankruptcy, “we perform the

same function as did the district court: Fact findings of the

bankruptcy court are reviewed under a clearly erroneous standard

and issues of law are reviewed de novo.”3    Whether a petition was

filed in good faith is a question of fact that we review for clear

error.4   “When a finding of fact is premised on an improper legal

standard, or a proper one improperly applied,” however, that

finding is reviewed de novo.5

B.   Good Faith



     3
          Nationwide Mut. Ins. Co. v. Berryman Prods. (In re
Berryman), 

, 943 (5th Cir. 1998).
     4
          In re Elmwood Dev. Co., 

, 510 (5th Cir.
1992) (chapter 11 petition); see also In re Love, 

,
1356 (7th Cir. 1992) (chapter 13 petition). “A finding of fact
is clearly erroneous when although there is evidence to support
it, the reviewing court on the entire evidence is left with a
firm and definite conviction that a mistake has been committed.”
In re Missionary Baptist Found. of Am., 

, 209 (5th
Cir. 1983)) (internal quotation marks omitted).
     5
          In re Missionary Baptist Found. of 

; see also In re Mercer, 

, 402 (5th Cir. 2001)
(“[T]he clear error standard does not apply to findings of fact
resulting from application of an incorrect legal standard.”).
     Section 1325(a)(3) of the Bankruptcy Code states that the

“court shall confirm a plan if . . . the plan has been proposed in

good faith and not by any means forbidden by law.”6                     “The good

faith standard protects the integrity of the bankruptcy courts and

prohibits a debtor’s misuse of the process where the overriding

motive is to delay creditors without any possible benefit, or to

achieve   a     reprehensible    purpose    through       manipulation    of   the

bankruptcy laws.”7        In proceedings to confirm a plan, the debtor

has the burden of proving good faith8; in proceedings to convert or

dismiss for lack of good faith, the creditor has the burden of

showing that the debtor lacks good faith.9

     To determine whether a Chapter 13 plan was filed in good

faith,    the       bankruptcy   court     applies    a     “totality    of    the

circumstances” test.10       Under this test, the court considers such

factors as (1) “the reasonableness of the proposed repayment

plan,”11 (2) “whether the plan shows an attempt to abuse the spirit

of the bankruptcy code,”12 (3) whether the debtor genuinely intends


     6
              11 U.S.C. § 1325(a)(3).
     7
              In re Elmwood Dev. 

.
     8
          See Hardin v. Caldwell, 

, 1126 (6th Cir.
1990) (In re Caldwell).
     9
              See In re 

.
     10
          E.g., In re Chaffin, 

, 1073 (5th Cir.
1987) (“Chaffin I”), modified, In re Chaffin, 

, 216-
17 (5th Cir. 1988) (“Chaffin II”).
     11
              

to effectuate the plan, (4) whether there is any evidence of

misrepresentation, unfair manipulation, or other inequities, (5)

whether the filing of the case was part of an underlying scheme of

fraud with an intent not to pay, (6) whether the plan reflects the

debtor’s ability to pay, and (7) whether a creditor has objected to

the plan.13   In applying this test, the bankruptcy court “exacts an

examination of all of the facts in order to determine the bona

fides of the debtor.”14

      If the bankruptcy court determines that a Chapter 13 plan has

not   been    filed   in   good   faith,   it   may   deny   confirmation.15

Furthermore, at the request of an interested party, the court may

convert a Chapter 13 case not filed in good faith to one under

Chapter 7 or dismiss the case in its entirety, “whichever is in the

best interests of creditors and the estate.”16

      13
          Chaffin 

, modifying Chaffin I,

.
      14
             Chaffin 

.
      15
          Section 1325(a)(3) of the Bankruptcy Code states that
“the court shall confirm a plan if . . . the plan has been
proposed in good faith and not by any means forbidden by law.”
11 U.S.C. § 1325(a)(3).
      16
             Section 1307(c)(5) provides that:

      on request of a party in interest . . . and after
      notice and a hearing, the court may convert a case
      under . . . [chapter 13] to a case under chapter 7 of
      this title, or may dismiss a case under this chapter,
      whichever is in the best interests of creditors and the
      estate, for cause, including . . . denial of
      confirmation of a plan under section 1325 of this title
      and denial of a request made for additional time for
      filing another plan or a modification of a plan.
C.   Application

     Before determining whether the bankruptcy court applied the

totality-of-the-circumstances test and, if so, whether the court

applied it correctly, we must first identify the standard of review

that applies, i.e., de novo or clear error.          Suggs insists that,

despite the general rule that, being factual, findings of good

faith are reviewed for clear error,17 de novo review should be

applied in this instance, because, she contends, the bankruptcy

court did not properly apply the totality-of-the-circumstances

test.     The district court agreed with Suggs, holding that the

bankruptcy    court   had   not   considered   the    totality   of   the

circumstances.     In so holding, that court concluded that the

bankruptcy court had failed to give adequate weight to various

indicia of bad faith.   Specifically, the district court focused on

the timing of the filing of the petition and the possibility that

the debt would be non-dischargeable under Chapter 7.

     We disagree with the district court’s ruling and conclude that

the bankruptcy court applied the totality-of-the-circumstances test



11 U.S.C. § 1307(c)(5). Although not explicitly enumerated
as a reason for dismissal or conversion, “[m]ost courts have
held that lack of good faith can be cause for dismissal or
conversion of a chapter 13 plan.” 8 COLLIER ON BANKRUPTCY §
1307.04[10] at 1307-21 (15th ed. revised 1996) (collecting
cases).
     17
          In re Elmwood Dev. 

; In re
Missionary Baptist Found. of 

(“A finding of
fact is clearly erroneous when although there is evidence to
support it, the reviewing court on the entire evidence is left
with a firm and definite conviction that a mistake has been
committed.”) (internal quotation marks omitted).
and did so properly.     The bankruptcy court analyzed each of the

most relevant indicia of bad faith, rejecting each in turn for

reasons that are not clearly erroneous.      It ultimately concluded

that

       [t]he indicia that [Suggs’s counsel] argues of bad faith,
       there is a lot of smoke.      [Suggs’s counsel] was not
       improper or wrong in pursuing this matter. He did have
       something to shake and pop on each one of these items.
       It’s just that when you shake and pop and clear the
       smoke, there’s no real fire.

The Stanleys filed their petition, ruled the court, because “they

had no place else they could go and continue to live, pay their

bills, and . . . support their dependents.”

       It is true that the bankruptcy court did not explicitly state

that it was considering the individual circumstances cumulatively,

but the Supreme Court has instructed that a court is not required

to make “a formulary statement” that it considered the relevant

facts “individually and cumulatively” in applying the totality-of-

the-circumstances test.18   Rather, “[i]t suffices that that was the

fair import of the [lower court’s] opinion.”19      Here, “the fair

import” of the bankruptcy court’s analysis is that it considered

each indicium and considered them all in toto. We therefore review

the bankruptcy court’s determination that the Stanleys acted in

good faith for clear error.    “As long as there are two permissible

views of the evidence, we will not find the factfinder’s choice

between competing views to be clearly erroneous. If the bankruptcy

       18
            Early v. Packer, 

, 9 (2002) (per curiam)
       19
            

of the evidence is plausible in light of the record

viewed as a whole, we will not reverse it.”20

      After reviewing the briefs and the record, and hearing oral

argument by able counsel for the parties, we conclude that the

bankruptcy court’s determination that the Stanleys acted in good

faith was not clearly erroneous. First, that court’s determination

that the timing of the petition and the prior bankruptcy filing did

not indicate bad faith is plausible.          Although these factors are

relevant, they are not per se evidence of a lack of good faith, and

we   cannot   say   that   the   bankruptcy    court   clearly   erred   in

discounting them.

      Second, the bankruptcy court did not clearly err in declining

to consider whether the Stanleys’ debt to Suggs would be non-

dischargeable as a “willful and malicious injury” under Section

523(a)(6) of Chapter 7.21    Contrary to Suggs’s contention, Arkansas

law does not appear to require a finding that Mrs. Stanley acted

maliciously within our interpretation of Section 523(a)(6).              We

have held that the “test for willful and malicious injury under

Section 523(a)(6) . . . is condensed into a single inquiry of

whether there exists ‘either an objective substantial certainty of

harm or a subjective motive to cause harm’ on the part of the


      20
          In re Acosta, 

, 372 (5th Cir. 2005)
(internal citation omitted).
      21
           Chapter 7 states that any debt “for willful and
malicious injury by the debtor to another entity or to the
property of another entity” is non-dischargeable. 11 U.S.C. §
523(a)(6).
debtor.”22   In this case, a verdict against Mrs. Stanley could have

been supported by a finding that she acted with reckless disregard

for the consequences of her act, a finding that would place the

actions outside the scope of Section 523(a)(6).         More importantly,

even if the debt were non-dischargeable under Chapter 7, this is

only one of many factors to be considered in the totality of the

circumstances.       Alone, it does not demand a finding of a lack of

good faith.

     Third,    the    bankruptcy   court   considered   and   rejected   the

remaining asserted signals of bad faith —— for example, Mrs.

Stanley’s decision to stop working, the discovery disputes, a loan

application containing incorrect information, and the Stanleys’

stripping of equity from their home —— because the court accepted

the justifications that the Stanleys offered for these actions

during their testimony. These determinations are, after all, based

largely on the trial court’s credibility calls, to which we (and

the district court sitting as an appellate court) owe considerable

deference. We decline to call them clearly erroneous and therefore

decline to disturb them.

     Finally, Suggs’s repeated assertion that the Stanleys’ motive

of spite somehow warrants a finding of bad faith fails.         Even if we

assume arguendo that the Stanleys did act with spite and malice,

this would not mean that they are automatically not entitled to the

protection of the Bankruptcy Code: One may be an honest debtor even


     22
             In re Williams, 

, 509 (5th Cir. 2003).
if his past dealings with his creditor have been dishonest.      The

debt in Chaffin I and Chaffin II, for example, stemmed from the

debtor’s conviction for securities fraud and theft.23

     Inasmuch as “the bankruptcy court’s account of the evidence is

plausible in light of the record viewed as a whole,”24 we reverse

the appellate ruling of the district court and affirm the original

good faith ruling of the bankruptcy court.

                            III. CONCLUSION

     The bankruptcy court applied the totality of the circumstances

test and did so properly.    Its conclusion that the Stanleys acted

in good faith is not clearly erroneous.       Accordingly, we REVERSE

the appellate ruling of the district court and AFFIRM the rulings

of the bankruptcy court that Suggs appealed.     As we have concluded

that the bankruptcy court’s decisions were not error, we deny

Suggs’s request that the bankruptcy petition be dismissed, and we

REMAND this case to the bankruptcy court for further proceedings

consistent with its affirmed ruling.




     23
          Chaffin 

.
     24
          In re 

.