In re Puffer, 674 F.3d 78, 82–83 (1st Cir. 2012) (Selya, Souter, Lipez)

“Fee-only” Chapter 13 plan is not per se bad faith. “We believe that the totality of the circumstances approach to adjudicating good faith should apply equally to inquiries under section 1325. . . . The totality of the circumstances test cannot be reduced to a mechanical checklist . . . . But we, like other courts, are reluctant to read per se limitations into section 1325’s good faith calculus. . . . [W]e reject the bankruptcy court’s holding that fee-only Chapter 13 plans are per se in bad faith. . . . [F]ee-only arrangements may be vulnerable to abuse by attorneys. . . . Notwithstanding these shortcomings, endorsing a blanket rule that fee-only Chapter 13 plans are per se submitted in bad faith would be to throw out the baby with the bathwater. While fee-only plans should not be used as a matter of course, there may be special circumstances, albeit relatively rare, in which this type of odd arrangement is justified. Given this possibility, prudence dictates that we hew to the overarching principle that the presence or absence of good faith should be ascertained case by case. . . . This opinion should by no means be read as a paean to fee-only Chapter 13 plans. The dangers of such plans are manifest, and a debtor who submits such a plan carries a heavy burden of demonstrating special circumstances that justify its submission.”

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