In re Paliev, No. 11-17647-BFK, 2012 WL 3564031, at *5 (Bankr. E.D. Va. Aug. 17, 2012) (Kenney)

Not bad faith that debtor borrowed from 401(k) to pay bankruptcy counsel and to cure mortgage arrearage or that case has been pending for nine months without confirmation of a plan. “[T]he Debtor borrowed $4,600 against her 401(k) Plan shortly before her bankruptcy filing in order to fund her bankruptcy counsel’s retainer and make up her mortgage arrearages. . . . [I]f she had not borrowed from her 401(k) in order to pay the mortgage arrearages, the arrearages would have had to be paid in her Chapter 13 Plan, to the detriment of the unsecured creditors. Consequently, the Court cannot find a lack of good faith based on the Debtor’s pre-petition borrowing from her 401(k).”

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