Angela Christine McGuire-Pike and Richard Steven Pike

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
ANGELA C. MCGUIRE-PIKE
And RICHARD S. PIKE, 	No. 14-13365 ta7
Debtors.
MEMORANDUM OPINION
Creditors Brian and Michelle Crawford moved to dismiss Debtors’ Chapter 7 case under
§ 707(a),1 alleging the case was filed in bad faith. The Court held a final hearing on the motion
on April 28, 2015, at which the Debtors and the Crawfords appeared pro se. For the reasons set
forth below the Court will deny the motion.
I. 	FINDINGS2
Debtors and the Crawfords are neighbors, living several houses apart in a residential area
on Albuquerque’s west side. Debtors moved into the neighborhood in about 2008.
Debtor and the Crawfords used to be friendly and their children used to play together. By
the middle of June, 2011, however, they had a serious falling out over the rightful ownership of
two old pickup trucks and some tools.
Mr. Crawford sued Debtors in the Metropolitan Court of Bernalillo County, New Mexico
in 2012, commencing an action captioned Brian L. Crawford, et al v. Richard Pike, et al, no. T-
4-CV-2012-007731.
1 Unless otherwise noted, all statutory references are to 11 U.S.C.
2 In making these findings, the Court took judicial notice of the docket. See St. Louis Baptist
Temple, Inc. v. Fed. Deposit Ins. Corp., 605 F.2d 1169, 1172 (10th Cir. 1979) (a court may, sua
sponte, take judicial notice of its docket); In re Mailman Steam Carpet Cleaning Corp., 196 F.3d
1, 8 (1st Cir. 1999) (“[t]he bankruptcy court appropriately took judicial notice of its own
docket”); In re Quade, 496 B.R. 520, 524 (Bankr. N.D. Ill. 2013) (a “bankruptcy court [is
authorized] ... to take judicial notice of its own docket”).
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 1 of 12

The Metropolitan Court awarded the Crawfords3 a $7,725 money judgement against
Debtors on October 8, 2014 (the “Judgment”).
After entry of the Judgment, Mr. Pike used his Chevrolet Tahoe to haul off several loads
of personal property from the house. 	The Crawfords allege it was valuable property that Mr.
Pike was hiding or transferring. Mr. Pike said he was hauling trash or used household items to
donate to local charities. The Crawfords did not carry their burden of proving that Mr. Pike was
transferring or concealing assets.
Before filing bankruptcy the Debtors made improvements to their house and yard,
including landscaping work, interior remodeling, and new furniture. 	There is little evidence
about when the improvements were made, how much they cost, or why Debtors chose to make
the improvements when they did. 	The Court finds that there was nothing improper about the
improvements.
In response to the Crawfords’ efforts to collect the Judgment (e.g., seeking a writ of
attachment and a transcript of judgment), Debtors filed this bankruptcy case on November 13,
2004. 	Debtors previously filed a bankruptcy case on March 9, 1998, receiving a Chapter 7
discharge on April 22, 1999.
Mrs. Pike is employed as a legal technician with the U.S. Department of Agriculture
Office of General Counsel. She is an hourly employee and earns $3,579.33 a month on average.
Richard Pike is not employed and receives worker’s compensation and social security
benefits totaling $2,622.54 each month. 	Mr. Pike was initially injured in 2011, and has been
receiving some sort of assistance since then. 	The maximum Mr. Pike can receive in disability
3 At some point Mrs. Crawford was added as an additional plaintiff.
-2-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 2 of 12

payments is 80% of his income prior to the injury. 	Debtors’ income decreased when Mr. Pike
was injured.
Debtors have two daughters, ages 16 and 18. 	Each daughter receives approximately
$361.00 a month in social security dependent coverage, due to Mr. Pike’s disability. 	Both
daughters are dependents. On the petition date the Debtors’ current monthly income was:
Mr. Pike 	$2,622.54
Mrs. Pike 	$3,579.33
Younger daughter: 	$ 	361
Elder daughter: 	$ 	361
Total: 	$6,923.87 (or $83,086 per year)
The elder daughter’s monthly amount will be discontinued shortly, if it hasn’t been
already, because it was due to stop when she turned 18 or graduated from high school. She was
scheduled to graduate in May, 2015. 	Without her monthly government stipend, the annual
income for the household would be $6,562.87 per month or $78,754.44 per year. 	In less than
two years, when the younger daughter turns 18 or graduates, the annual income will drop to
$6,035.20 per month or $74,422.44 per year.
The Crawfords’ attempt to collect the Judgment was a major reason for the bankruptcy
filing, but it was not the only reason. 	Debtors have about $19,000 of dischargeable debt,
including the Judgment. Debtors’ income was reduced by Mr. Pike’s work-related injury. They
have two teen-aged daughters, and their monthly household expenses exceed their net monthly
income.
There is no evidence that Debtors received any assets from Mrs. Pike’s father’s probate
estate, or that Debtors receive any income from breeding or showing their eight beagles.
-3-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 3 of 12

Debtors’ lifestyle is relatively modest. 	Their house, worth about $190,000, is not
particularly large or expensive. An annual income of $74,000-$83,000 is not unusually high for
a family of four, although it is above average. 	The Debtors’ cars are older and not flashy or
expensive. Nothing in their monthly expense budget seems out of line.
Debtors retained a bankruptcy attorney to prepare their schedules and statement of
financial affairs, file their case, and attend the meeting of creditors. 	The attorney did not
represent Debtors at the final hearing on the motion to dismiss.
There are some mistakes in Debtors’ schedules and statement of financial affairs. 	The
main errors are:
• 	On the Statement of Financial Affairs, Debtors report that Mrs. Pike made
$23,932.78 in 2014. 	The trial evidence showed that Mrs. Pike made closer to
$36,000 that year;
• 	The Capital One Auto Finance secured claim for $15,250 was most likely paid
when Debtors’ purchased a Chevrolet Malibu, and therefore is no longer a debt;
• 	The two GM Financial claims of about $8,500 each appear to be duplicates;
• 	The “Wfds” debt for $6,580 is an unsecured debt and should not have been
reported on Schedule D;
• 	The Check N’ Go and the Axcssfn/Cngo claims for about $1,800 each appear to
be duplicates;
• 	The two Credit One Bank debts are probably duplicates;
• 	The two Kohl’s debts are probably duplicates.
-4-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 4 of 12

• 	Mrs. 	Pike’s 	student 	loan 	debt 	is 	approximately 	$81,416.25. 	Mrs. 	Pike
consolidated this debt, and the many “NM Ed Asst” claims listed on Schedule F
are likely the original student loans that have since been consolidated.
The Pikes are not particularly sympathetic bankruptcy debtors. 	This is their second
bankruptcy case. They have a history of bringing suits against creditors, mostly in federal court,
apparently alleging violations of the Unfair Debt Collection Practices Act.4 The Metropolitan
Court judge obviously did not think much of how they disposed of the Crawfords’ trucks and
tools. Finally, Mr. Pike apparently drew unemployment insurance to which he was not entitled,
to the tune of $14,810.28.5 That debt apparently would have been nondischargeable under
§ 523(a)(2), but for the reaffirmation of the debt.
On the other hand, the Crawfords are not sympathetic creditors. 	Both have criminal
records. 	At the time he signed the pickup truck titles over to Mr. Pike, Mr. Crawford was on
parole and Mrs. Crawford was incarcerated in Arizona. 	The Crawfords also filed a Chapter 7
bankruptcy case, in mid-2013. The Crawfords’ litigation of this matter has been extremely
aggressive. 	They contacted other creditors with a letter containing reckless allegations and
disclosing the Debtors’ social security numbers. 	The motion to dismiss contains numerous
inflammatory allegations based almost entirely on supposition and conjecture. 	They filed a
disciplinary complaint against Debtor’s bankruptcy counsel. The Crawfords spy on the Debtors,
take pictures of them, and do all they can to make Debtors’ life in the neighborhood unpleasant.
4 Approximately eight suits were brought in federal court between 2002 and 2012. 	One
additional suit was brought in state court.
5 See the Reaffirmation Agreement with the NM Department of Workforce Solutions, doc. 22.
-5-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 5 of 12

II. 	DISCUSSION
Section 707(a)6 provides:
The court may dismiss a case under this chapter only after notice and a hearing
and only for cause, including—
(1) unreasonable delay by the debtor that is prejudicial to creditors;
(2) nonpayment of any fees or charges required under chapter 123 of title 28;
(3) failure of the debtor in a voluntary case to file, within fifteen days or such
additional time as the court may allow after the filing of the petition commencing
such case, the information required by paragraph (1) of section 521(a), but only
on a motion by the United States trustee.
The burden is on the moving party to establish cause under §707(a). 	In re Bushyhead,
525 B.R. 136, 137 (Bankr. N.D. Okla. 2015) (citing Piazza v. Nueterra Healthcare Physical
Therapy, LLC (In re Piazza), 719 F.3d 1253, 1266 (11th Cir. 2013)); Simon v. Amir (In re Amir),
436 B.R. 1, 16 (6th Cir. BAP 2010).
Although not listed as one of the enumerated factors constituting “cause” for dismissal
under § 707(a), most courts have held that evidence of a debtor’s “bad faith” in filing a Chapter
7 case is cause for dismissal. 	In re Snyder, 509 B.R. 945, 950 (Bankr. D.N.M. 2014) (citing
Indus. Ins. Services, Inc. v. Zick (In re Zick), 931 F.2d 1124, 1126–27 (6th Cir. 1991)). See also
6 Collier on Bankruptcy ¶ 707.03[1] (16 th ed. 2010) (the enumerated factors of § 707(a) are
meant to be illustrative and the Court may dismiss the case on other grounds for cause). While
the Tenth Circuit has not yet ruled on the issue, this Court has adopted the view that bad faith can
constitute cause for dismissal under § 707(a). Snyder, 509 B.R. at 950.
6 The Crawfords did not cite to §707(b) in their motion to dismiss. At the final hearing, the
Crawfords argued bad faith dismissal under §707(a) rather than abuse of the provisions of
Chapter 7 under §707(b). 	While some of the trial evidence could be construed as relevant to a
§ 707(b) action, it was also relevant to the Crawfords’ “bad faith” argument under § 707(a), so
there was no implied consent to amend the pleadings to raise an unpleaded §707(b) dismissal.
The Court therefore will not address § 707(b).
-6-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 6 of 12

To determine whether a chapter 7 case was filed in bad faith, courts must review the
totality of the circumstances. 	In re Piazza, 719 F.3d 1253, 1271–72 (11th Cir. 2013) (§ 707(a)
bad faith inquiry requires the bankruptcy court to sift through the totality of the circumstances to
see that injustice or unfairness is not done); In re Quinn, 490 B.R. 607, 618 (Bankr. D.N.M.
2012) (applying a totality of the circumstances test to evaluate the debtor's good faith); In re
Standiferd, 2008 WL 5273690, at *12 (Bankr. D.N.M. 2008) (§ 707(a) bad faith inquiry requires
analysis of the totality of the circumstances); Blumenberg v. Yihye (In re Blumenberg), 263 B.R.
704, 715 (Bankr. E.D.N.Y. 2001) (same); In re Griffieth, 209 B.R. 823, 826 (Bankr. N.D.N.Y.
1996) (applying multiple factors viewed together on an ad hoc basis to determine bad faith based
on a totality of the circumstances).
Various factors have been identified and applied to determine whether bad faith exists:
1. 	Whether the debtor's manipulations (if any) had the effect of frustrating
one particular creditor;
2. 	The absence of an attempt to pay creditors;
3. 	The debtor's failure to make significant lifestyle changes;
4. 	Whether the debtor has sufficient resources to pay a substantial portion of
debts;
5. 	Whether the debtor inflated expenses to disguise financial well-being;
6. 	Whether the debtor is overutilizing protections of the Bankruptcy Code to
the conscious detriment of creditors;
7. 	Whether the debtor reduced his creditors to a single creditor in the months
prior to filing his petition;
8. 	Whether the debtor failed to make lifestyle adjustments or continued
living an expansive or lavish lifestyle;
9. 	Whether the debtor filed the case in response to a judgment in pending
litigation;
10. 	The unfairness of using Chapter 7;
11. 	Whether the debtor is paying debts to insiders;
12. 	Whether the debtor transferred assets;
13. 	Whether the debtor employed a deliberate and persistent pattern of
evading a single major creditor;
14. 	Whether the debtor failed to make candid and full disclosure;
15. 	Whether the debts are modest in relation to assets and income; and
16. 	Whether 	there 	are 	multiple 	bankruptcy 	filings 	or 	other 	procedural
“gymnastics.”
-7-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 7 of 12

In re Lombardo, 370 B.R. 506, 512 (Bankr. E.D.N.Y. 2007) (listing 14 of the factors); In re
O'Brien, 328 B.R. 669, 675 (Bankr. W.D.N.Y. 2005) (same); In re Quinn, 490 B.R. at 618
(listing all 16 factors but emphasizing the first six); In re Baird, 456 B.R. 112, 116–17 (Bankr.
M.D. Fla. 2010) (listing 15 factors).
Conduct that would support a denial of discharge under § 727 or nondischargeability
action under § 523 cannot be considered as part of a bad faith analysis under § 707(a). “[W]here
both a specific and a general statute address the same subject matter, the specific one takes
precedence regardless of the sequence of the enactment, and must be applied first. Therefore, a
debtor's misconduct should be analyzed under the most specific Code provision that addresses
that type of misconduct.” In re Padilla, 222 F.3d 1184, 1192 (citations omitted). See also In re
Quinn, 490 B.R. at 617 (“[D]ismissal of a Chapter 7 case for cause may not be based exclusively
or primarily on a debtor's conduct that forms the basis for objections to discharge under 11
U.S.C. § 727 or objections to dischargeability of particular debts under 11 U.S.C. § 523.”).
A debtor's ability to pay creditors, by itself, is not enough to support a finding of bad
faith. In re Smith, 507 F.3d 64, 74 (2d Cir. 2007) (ability to repay debts is not sufficient, but is
part of the inquiry); McDow v. Smith, 295 B.R. 69, 81 (E.D. Va. 2003) (high annual income and
lavish lifestyle were insufficient cause for § 707(a) dismissal); In re Quinn, 490 B.R. at 617
(same). Courts rely on the legislative history to support this line of reasoning. In re Perlin, 497
F.3d 364, 374 (3rd Cir. 2007) (dismissal based on ability to repay is expressly prohibited by the
legislative history); In re Marks, 174 B.R. 37, 41 (E.D. Pa. 1994); In re Blackmon, 3 B.R. 167,
169 (Bankr. S.D. Ohio 1980); In re Nina Merchandise Corp., 5 B.R. 743, 746 (Bankr. S.D.N.Y.
1980). The House and Senate reports state in part:
-8-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 8 of 12

The section does not contemplate, however, that the ability of the debtor to repay
his debts in whole or in part constitutes adequate cause for dismissal. To permit
dismissal on that ground would be to enact a non-uniform mandatory chapter 13, in
lieu of the remedy of bankruptcy.
S. Rep. No. 989, 95th Cong., 2d Sess. 94 (1978); H.R. Rep. No. 595 95 th Cong., 1st Sess. 380
(1977). 	In In re Goulding the bankruptcy court, citing the foregoing language, said “It is
difficult to contemplate how Congress could more emphatically have stated that the debtor's net
worth or future prospects is not ‘cause’ as the word is used in Section 707 for dismissal.” 	79
B.R. 874, 876 (Bankr. W.D. Mo. 1987).
Bankruptcy courts should not use “bad faith” as “a loose cannon which is to be pointed in
the direction of a debtor whose values do not coincide precisely with those of the court.” In re
Huckfeldt, 39 F.3d 829, 832 (8th Cir. 1994) (quoting Sinkow v. Latimer (In re Latimer), 82 B.R.
354, 364 (Bankr .E.D. Pa. 1988)). 	Rather, dismissing Chapter 7 cases for bad faith is a severe
consequence that is appropriate only in “egregious cases that entail concealed or misrepresented
assets and/or sources of income, lavish lifestyles, and intention to avoid a single debt based upon
conduct akin to fraud, misconduct or gross negligence.” 	In re Perlin, 497 F.3d 364, 373 (3rd
Cir. 2007) (citation omitted); In re Quinn, 490 B.R. at 618 (“dismissal for ‘cause’ . . . based on
debtor’s lack of good faith must be reserved for truly egregious cases”). 	Further, courts have
discretion when ruling on a motion to dismiss under § 707(a). 	Gilboy v. Reukema, 2015 WL
1921618, at *1 (2d. Cir. 2015) (decision of bankruptcy court on a § 707(a) motion is reviewed
for abuse of discretion).
The Crawfords rely on Debtors’ relatively high income, overstated debts, refusal to pay
the Judgment, and home improvements as the primary indicators of bad faith. 	In response,
Debtors contend that their reduced income because of Mr. Pike’s injury, prospect of further
income reductions as their minor children achieve majority, and increased medical expenses
-9-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 9 of 12

have burdened the family. 	They argue that they were not able to pay the Judgment and need
bankruptcy relief.
The Court weighs the bad faith factors as follows:
Factor 	Good
Faith
Bad
Faith
Comment
Did debtor manipulations
frustrate a particular creditor?
X 	Debtors’ 	bankruptcy 	filing 	was 	prompted
mainly 	by 	the 	Judgment, 	but 	there 	is 	no
evidence of any manipulations that frustrated
creditors.
Any attempt to pay creditors? 	X 	Debtors 	have 	made 	no 	attempt 	to 	pay
Movants; there is no evidence regarding their
attempt to pay other creditors.
Did Debtors fail to make
significant lifestyle changes?
X 	Debtors have a relatively modest lifestyle.
Could Debtors pay substantial
portion of debts?
X 	It 	is 	possible 	Debtors 	could 	reduce 	their
expenses and pay creditors something. 	The
facts are not very stark, however. 	The means
test did not show any presumption of abuse.
The Crawfords did not seek dismissal under §
707(b). 	Debtor’s decision to file Chapter 7
rather than pay some creditors some amount
does 	not 	seem 	unreasonable, 	given 	their
financial situation.
Did Debtors inflate expenses to
disguise financial well-being?
X 	Although Debtors reported some debts twice
on 	their 	schedules, 	it 	was 	for 	noticing
purposes. 	Debtor’s monthly expense budget
does not appear to be inflated.
Are Debtors overutilizing the
Code to the detriment of
creditors?
X 	Although Debtors also filed a bankruptcy case
in 	1998, 	it 	does 	not 	appear 	Debtors 	are
overutilizing the Bankruptcy Code.
Did Debtors reduce their
creditors to a single creditor in
the months prior to filing his
petition?
X 	No, Debtors have 8-9 other creditors holding
dischargeable claims.
Did Debtors file the case in
response to a judgment?
X 	Debtors most likely filed bankruptcy to avoid
paying the Judgment.
Is it unfair to use Chapter 7? 	X 	No.
Are Debtors paying debts to
insiders?
X 	No.
Did Debtors transfer assets? 	X 	There was no evidence Debtors omitted any
material assets on their bankruptcy schedules
or transferred any assets.
-10-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 10 of 12

Did Debtors employ a
deliberate and persistent pattern
of evading a single major
creditor?
X 	No 	evidence 	that 	Debtors 	“evaded” 	the
Crawfords 	or 	any 	other 	creditor. 	The
bankruptcy filing came shortly after entry of
the Judgment
Did Debtors fail to make candid
and full disclosure?
X 	No 	evidence 	that 	Debtors 	failed 	to 	make
candid and full disclosures. Debtors had some
mistakes in their schedules and Statement of
Financial Affairs, but the mistakes appeared to
be 	innocent, 	and 	were 	not 	materially
misleading.
Are debts modest in relation to
assets and income?
X 	Yes. Financial hardship appears to result from
Mr. Pike’s disability and subsequent decrease
in 	household 	income, 	together 	with
nondischargeable debts owed for student loans
and 	improperly 	taken 	unemployment
compensation.
Were there multiple bankruptcy
filings or other procedural
gymnastics?
X 	No. 	The prior bankruptcy filing was in 1998
and 	had 	nothing 	to 	do 	with 	the 	Debtors’
current 	troubles 	and 	dispute 	with 	the
Crawfords.
All things considered, Debtors’ case is more persuasive. In both number and weight, the
“bad faith” factors weigh heavily in the Debtors’ favor. 	Debtors’ conduct does not satisfy the
high standard imposed under § 707(a) to warrant dismissal for bad faith filing. 	Based on the
evidence in the record, the Court is satisfied that the case was filed in good faith.
III. 	CONCLUSION
The facts presented in this case fail to meet the high standard required for bad faith dismissal
under § 707(a). The Court therefore will deny the Motion. A separate order will be entered.
_______________________________________________
Hon. David T. Thuma
United States Bankruptcy Judge
-11-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 11 of 12

Entered: July 10, 2015.
Copies to:
Angela C. McGuire-Pike
6020 Taurus Avenue NW
Albuquerque, NM 87114
Richard Pike
6020 Taurus Avenue, NW
Albuquerque, NM 87114
Brian Crawford
10512 Galileo Street NW
Albuquerque, NM 87114
Michelle Crawford
10512 Galileo Street NW
Albuquerque, NM 87114
-12-
Case 14-13365-t7 Doc 45 Filed 07/10/15 Entered 07/10/15 08:40:35 Page 12 of 12