MICHAEL J. KAPLAN, Bankruptcy Judge.
The Debtor in this Chapter 13 case tried, but failed, to completely pay off a balloon mortgage on her home in a prior Chapter 13 case, filed in 2013. She bound herself to pay the arrears under that Plan, and to pay the balloon by any of various means. None of those materialized. She now seeks to take a new approach toward that mortgage debt and argues that this Court may confirm a new Plan over the vigorous objection of the mortgagee who seems to be an "average guy" who took back a five-year mortgage with a balloon when he sold the house to the Debtor. (It had been his family home; he inherited it from his parents.) In the previous Chapter 13 case the Debtor left the then $60,000 balloon payment in place (it was due to be paid outside of the Plan in May of 2017) but she utilized 11 U.S.C. §1322(c)(2) to cure the pre-petition mortgage defaults. She planned to be able to pay the balloon payment through refinancing, or borrowing on her husband's retirement account, or collecting on an unliquidated personal injury cause of action, or by the sale of the home. May, 2017, came and went without any of those things occurring, and so the mortgagee (Mr. Borsick) sought and obtained lift of stay. In an effort to obtain reconsideration of that ruling, the Debtor proposed a modification to the 2013 Plan hoping to get another year to find a way to satisfy the balloon payment. The mortgagee argued through counsel that the modification was not permissible under 11 U.S.C. §1329 because (1) the plan payments had been completed (11 U.S.C. §1329(a) permits a modification only "before the completion of payments under such plan")
The Court rejected the Motion for Reconsideration and so the Debtor filed another petition. Now she proposes to retire what has become an approximately $66,000 balloon payment in equal monthly installments ending on the fifth anniversary of when the balloon was originally due. The mortgagee has strenuously objected.
Although this seems to be a matter of first impression, given that the parties have been unable to cite the Court to any decision directly on point (nor has the Court found one), the Court is satisfied that there is a substantial body of case law, originally developed under Chapter 11, that must be extended to cases in Chapter 13. The Chapter 11 cases do not permit any debtor to so readily escape the "binding effect" of confirmation of the earlier plan. Of course the United States Supreme Court in the case of Johnson v. Home State Bank, 501 U.S. 78 (1991) taught that Congress made provisions allowing repeat filings, in various places in the Bankruptcy Code. For example, 11 U.S.C. §109(g) expressly states that ". . . [N]o individual or family farmer may be a debtor under this title who has been a debtor in a case pending under this title at any time in the preceding 180 days if — (1) the case was dismissed by the court for willful failure of the debtor to abide by orders of the court, or to appear before the court in proper prosecution of the case; or (2) the debtor requested and obtained the voluntary dismissal of the case following the filing of a request for relief from the automatic stay provided by section 362 of this title", thus recognizing that a repeat filing that does not violate that provision is permissible.
However, critically, what is permissible when there is no objection by a creditor who relied upon the binding effect of an earlier plan is not permissible over such objection if the creditor will suffer "substantial prejudice" if the binding effect of the previous confirmed plan is ignored in favor of the plan proposed in the subsequent case. Such was the holding in this Court's decision in the case of In re Tillotson, 266 B.R. 565 (2001), in a repeat Chapter 11 context. That result was not cut from whole cloth, but rather borrowed from substantial jurisprudence to the same effect. The Tillotson case itself has been cited favorably in a number of other cases.
The principle applicable in this case, consequently, is properly stated in the case of In re Adams, 218 B.R. 597(Bankr.D.Kan.1998), but the bracketed edits are added by this writer to convert the discussion from Chapter 11 to Chapter 13 and this Debtor.
Id. at 600-602 [case authorities omitted.], and Tillotson, supra.
By no means does this Court suggest that this Debtor is not acting in "good faith." She is simply trying to save her home. But there is a difference between acting in good faith and proposing a "good faith" plan. The latter requires "fundamental fairness" to the objecting creditor, and that is lacking here.
In sum, this second filing by the Debtor attacks an essential element of the plan that was confirmed in her first case. She had used 11 U.S.C. §1322(c)(2) to deal with her pre-petition defaults in mortgage payments to Mr. Borsick, and counted on speculative prospects to meet the balloon payment. Because she could not afford to amortize the upcoming balloon payment over the life of the Plan, she could not have saved her home from foreclosure but for the use of §1322(c)(2) to cure the pre-petition arrears over the life of the five-year plan.
Further, there was no exceptional, unanticipated change in circumstances that might cause the Court to conclude that the second case was filed in good faith. As to her 2013 case, the various solutions that she contemplated were always speculative. The Great Recession had occurred several years before, the restricted mortgage lending thereafter was well-known by the year 2013, any prospect of a settlement of the personal injury action was always uncertain, etc.
Debtor's motion to continue the automatic stay is denied, and Mr. Borsick is free to continue his mortgage foreclosure proceeding to completion without fear of a subsequent filing by the Debtor or anyone acting in presumed authority regarding the real estate in question.
Moreover, he may add attorney's fees and costs to his secured claim in pursuing judgment of foreclosure and sale (if those are provided in the mortgage instrument), in light of the fact that this new filing thwarted the effect of last year's Order lifting the stay.
SO ORDERED.