Robert Louis Marrama v. Citizens Bank of Massachusetts, et al. (549 U.S. 365)
U.S. Supreme Court · decided February 21, 2007 · Supreme Court Database (Spaeth)
- Citation
- 549 U.S. 365 · 127 S. Ct. 1105
- Decided
- February 21, 2007
- Term
- October Term 2006
- Vote
- 5–4
- Majority author
- Justice Stevens
- Issue area
- Economic Activity
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Conservative
Opinion excerpt
Justice Stevens delivered the opinion of the Court. The principal purpose of the Bankruptcy Code is to grant a ‘“fresh start’” to the “‘honest but unfortunate debtor.’” Grogan v. Garner, 498 U. S. 279,286,287 (1991). Both Chapter 7 and Chapter 13 of the Code permit an insolvent individual to discharge certain unpaid debts toward that end. Chapter 7 authorizes a discharge of prepetition debts following the liquidation of the debtor’s assets by a bankruptcy trustee, who then distributes the proceeds to creditors. Chapter 13 authorizes an individual with regular income to obtain a discharge after the successful completion of a payment plan approved by the bankruptcy court. Under Chapter 7 the debtor’s nonexempt assets are controlled by the bankruptcy trustee; under Chapter 13 the debtor retains possession of his property. A proceeding that is commenced under Chapter 7 may be converted to a Chapter 13 proceeding and vice versa. 11 U. S. C. §§ 706(a), 1307(a) and (c).. An issue that has arisen with disturbing frequency is whether a debtor who acts in bad faith prior to, or in the course of, filing a Chapter 13 petition by, for example, fraudulently concealing significant assets, thereby forfeits his right to obtain Chapter 13 relief. The issue may arise at the outset of a Chapter 13 case in response to a motion by creditors or by the United States trustee either to dismiss the…
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