                                                         FILED
                                                          DEC 06 2016
 1                         NOT FOR PUBLICATION
                                                      SUSAN M. SPRAUL, CLERK
                                                        U.S. BKCY. APP. PANEL
 2                                                      OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5
 6   In re:                        )        BAP No. WW-15-1377-JuTaKu
                                   )
 7   SHAUN MICHEIL MARTIN and      )        Bk. No. 13-42847-DBL
     PATRICIA MAUREEN MCCARTHY,    )
 8                                 )
                    Debtors.       )
 9   ______________________________)
     FEARGHAL MCCARTHY,            )
10                                 )
                    Appellant,     )
11                                 )
     v.                            )        M E M O R A N D U M*
12                                 )
     SHAUN MICHEIL MARTIN; PATRICIA)
13   MAUREEN MCCARTHY; MICHAEL G. )
     MALAIER, Chapter 13 Trustee, )
14                                 )
                    Appellees.     )
15   ______________________________)
16
                   Argued and Submitted on November 17, 2016
17                          at Pasadena, California
18                         Filed - December 6, 2016
19           Appeal from the United States Bankruptcy Court for the
                         Western District of Washington
20
       Honorable Brian D. Lynch, Chief Bankruptcy Judge, Presiding
21                       ________________________
22   Appearances:     Appellant Fearghal McCarthy argued pro se.
                         ___________________________
23
     Before: JURY, TAYLOR, and KURTZ, Bankruptcy Judges.
24
25
26       *
          This disposition is not appropriate for publication.
27 Although it may be cited for whatever persuasive value it may
   have (see Fed. R. App. P. 32.1), it has no precedential value.
28 See 9th Cir. BAP Rule 8013-1.

                                      -1-
 1        Appellant Fearghal McCarthy (Mr. McCarthy) appeals from the
 2   bankruptcy court’s order dismissing the chapter 131 case of
 3   debtors, Shaun Micheil Martin (Mr. Martin) and Patricia McCarthy
 4   (Ms. McCarthy) (collectively, Debtors),2 without prejudice.        On
 5   appeal, Mr. McCarthy assigns error to the bankruptcy court’s
 6   decision to dismiss Debtors’ case without prejudice, contending
 7   that the underlying facts supported dismissal with prejudice.
 8   For the reasons stated below, we discern no error and AFFIRM.
 9                               I.    FACTS
10   A.   Prepetition Events
11        In 2005, the McCarthys were involved in a contentious and
12   acrimonious divorce proceeding.    In October 2006, while the
13   divorce was pending, Ms. McCarthy filed a chapter 7 bankruptcy
14   petition and obtained a discharge.      The rancor evident in the
15   divorce persisted in the bankruptcy case.      In January 2010, a
16   final divorce decree was entered.      The state court appointed
17   Mr. McCarthy as custodian of the couple’s two sons and ordered
18   Ms. McCarthy to pay child support and provide health insurance
19   for the children.   During the divorce proceedings, Mr. McCarthy
20   moved for contempt numerous times resulting in over $30,000 in
21   sanctions against Ms. McCarthy.
22        In April 2013, Mr. McCarthy applied for a judgment based on
23   a promissory note for $225,000 that Ms. McCarthy had signed as
24
        1
          Unless otherwise indicated, all chapter and section
25 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
26 “Rule” references are to the Federal Rules of Bankruptcy
   Procedure.
27
        2
          Neither Debtors nor the chapter 13 trustee have appeared
28 in this appeal.

                                      -2-
 1   part of the dissolution proceeding.           While Mr. McCarthy’s motion

 2   for judgment was pending, Debtors purchased a new 2013 Dodge

 3   Caravan minivan for $20,794 which they financed at 21% interest.

 4   Mr. McCarthy obtained entry of $224,000 judgment on April 24,

 5   2013.         He then threatened to garnish Ms. McCarthy’s wages.

 6   B.       Bankruptcy Events

 7            On April 28, 2013, Debtors filed their chapter 13 petition

 8   to prevent any garnishments based on the judgment.          Debtors’

 9   Schedule F showed approximately $350,000 in unsecured debt,

10   including Mr. McCarthy’s $224,000 judgment.3          Ms. McCarthy was

11   also delinquent on her support payments.          Debtors’ chapter 13

12   plan stated that they would make monthly payments of $2,000 for

13   thirty-six months and that they elected not to contribute their

14   tax refunds.         Secured debt payments were $300 monthly, payable

15   on the Dodge minivan and a 2008 Kia Spectra (Kia).

16            1.      Debtors First Amended Plan

17            Debtors filed a first amended plan dated May 31, 2013.

18   This plan raised the monthly payment to $2,104 with the

19   commitment period still at thirty-six months.          Debtors also

20   proposed to use their tax refunds to fund the plan, with the

21   exception of the first $1,400 of each refund.          The plan also

22   showed monthly domestic support payments to Mr. McCarthy of

23   $1,000 and raised the monthly payments on their secured car debt

24
25        3
          Mr. McCarthy asserts that the debts listed in Schedule F
26 are overstated by $91,583, consisting of a mortgage debt that was
   discharged in Ms. McCarthy’s chapter 7 case. He further contends
27 the scheduled debts are understated because the $30,000 in
   sanctions Mr. McCarthy obtained in the divorce proceedings was
28 not listed.

                                          -3-
 1   to $800.
 2           Mr. McCarthy objected to the confirmation of Debtors’
 3   amended plan, contending that Debtors’ Form B22C failed to
 4   accurately report their household size (three versus five) and
 5   their average monthly income.     He also alleged that Debtors’
 6   plan was proposed in bad faith because they purchased the new
 7   minivan prior to filing their bankruptcy case and accelerated
 8   payments in the plan on that debt.     Mr. McCarthy further argued
 9   that Debtors’ living expenses included excessive or unwarranted
10   amounts and complained that the plan failed to commit Debtors’
11   federal and state income tax refunds in their entirety.4
12           2.   Confirmation of Debtors’ Second Amended Plan
13           About a week before the hearing on Mr. McCarthy’s objection
14   to Debtors’ first amended plan, Debtors filed their second
15   amended plan dated July 30, 2013, causing the evidentiary
16   hearing on confirmation to be rescheduled.     Debtors also amended
17   their Schedules I and J.     Amended Schedule I showed that
18   Mr. Martin was unemployed and listed his income as between
19   $1,800-$2,200 a month whereas the previous Schedule I showed
20   Mr. Martin’s income as $1,004 per month.     The amended Form B22C
21   reduced Debtors’ household size to three, noted that Debtors
22   were above median income with negative disposable income, and
23   showed the applicable commitment period as five years.
24           The second amended plan indicated monthly payments of
25   $2,104 for four months and $2500 thereafter for a term of sixty
26
27
         4
          Mr. McCarthy, an accountant by trade, continued to raise
28 issues related to Debtors’ tax returns throughout this case.

                                      -4-
 1   months.   Debtors’ treatment of their tax refunds stayed the
 2   same, but they lowered the payment on the minivan to the
 3   contractual rate of $519.   The plan showed that Debtors would
 4   pay at least $95,081.23 to allowed nonpriority unsecured claims
 5   for a return of 27% on allowed claims.
 6        Mr. McCarthy objected to Debtors’ second amended plan,
 7   alleging that the plan was not proposed in good faith due to
 8   Debtors’ purchase of the minivan prior to their filing.
 9   Although some expenses had been adjusted in their amended
10   Schedule J, Mr. McCarthy continued to object to certain expenses
11   as excessive or unwarranted.   He further asserted that Debtors
12   offered no reason or authority for their retention of the first
13   $1,400 of any tax refund.   He also pointed out that, although
14   Debtors acknowledged a prepetition support payment default of
15   over $11,000, they failed to make a provision for payment of
16   that debt in the plan.   Finally, Mr. McCarthy complained that
17   Debtors’ Schedule I and J were misleading.
18        The chapter 13 trustee submitted a brief in support of
19   confirmation.
20        On November 6, 2013, the bankruptcy court held an
21   evidentiary hearing on confirmation.   Mr. Martin, Ms. McCarthy,
22   and Mr. McCarthy testified and numerous exhibits were offered
23   into evidence.   The bankruptcy court took the matter under
24   advisement.
25        On November 21, 2013, the bankruptcy court issued an order
26   setting forth its findings of fact and conclusions of law.     The
27   court overruled Mr. McCarthy’s objections and confirmed Debtors’
28

                                    -5-
 1   second amended plan.5    The court found that Debtors had filed
 2   their petition in good faith after applying the factors set
 3   forth in Leavitt v. Soto (In re Leavitt), 171 F.3d 1219, 1224
 4   (9th Cir. 1999).     The court also found the plan was proposed in
 5   good faith and committed substantially more than their projected
 6   disposable income for the sixty month commitment period of the
 7   plan.
 8           In addressing Mr. McCarthy’s bad faith argument based on
 9   the purchase of the minivan, the court concluded that Debtors’
10   purchase did not indicate a lack of good faith when they
11   successfully modified the interest rate from over 20% down to 6%
12   and demonstrated that their family needed a reliable car.
13           The bankruptcy court also found that the discrepancies in
14   the schedules and Form B22C were mistakes primarily due to the
15   sloppiness of Debtors’ attorney and Debtors.     The court opined
16   that neither understood the basic strategy of chapter 13
17   practice applicable to Debtors’ situation.     The court observed
18   that had Debtors’ attorney and Debtors properly analyzed the
19   case, Debtors would have rushed to claim they were above median
20   debtors for two reasons.
21           First, once they corrected the household size to three it
22   was obvious that their monthly projected disposable income was
23   $1080 in the negative.     According to the court, for purposes of
24
25       5
          Mr. McCarthy also filed a motion to dismiss Debtors’ case
26 with prejudice and an order shortening time to have the motion
   heard the same day as the evidentiary hearing on confirmation.
27 The bankruptcy court denied the order shortening time without
   prejudice to Mr. McCarthy’s refiling of the motion and scheduling
28 a hearing in due course.

                                      -6-
 1   the disposable income test, Debtors would have no obligation to
 2   pay any money to nonpriority unsecured creditors such as the
 3   claim filed by Mr. McCarthy for the $224,000 judgment and the
 4   vast majority of the over $30,000 in monetary sanctions arising
 5   out of the dissolution.
 6        Second, the court noted that at the time Debtors filed
 7   their case, there was no applicable commitment period for
 8   debtors with negative income under the holding in Maney v.
 9   Kagenveama (In re Kagenveama), 541 F.3d 868 (9th Cir. 2008).
10   Accordingly, the bankruptcy court concluded: “Instead of running
11   away from status as above median debtors, they should have been
12   embracing it, as they could have been arguing for an even
13   shorter plan.”
14        In the end, the bankruptcy court decided that the facts
15   showed Debtors were not manipulating the schedules or their
16   income to their advantage but, rather, that they and their
17   attorney did not handle the case competently from the outset.
18        The court also found that given the size of the proposed
19   plan payment, the budget submitted in the most recent schedules,
20   and the substantial disbursement to unsecured creditors,
21   Debtors’ proposal to keep the first $1,400 of any tax refund was
22   reasonable and prudent.
23        3.   Postconfirmation Modification:    Third Amended Plan
24        Debtors filed a third amended plan dated April 3, 2014, and
25   requested modification of their confirmed plan based on
26   increased income and expenses.    The third amended plan showed
27   plan payments in the amount of $23,224.68 through March 2014 and
28   $2900 per month commencing May 1, 2014.    The third amended plan

                                      -7-
 1   also indicated that Debtors would pay $109,000 to unsecured
 2   creditors for a return of 30% of their allowed claims.
 3        On April 29, 2014, Mr. McCarthy filed an objection to
 4   Debtors’ third amended plan.   There, he stated that he received
 5   information that Mr. Martin had returned to regular, union
 6   assignment work shortly following the November 6, 2013 hearing
 7   on confirmation and that he had been regularly employed
 8   thereafter.   Mr. McCarthy informed the court that he told the
 9   chapter 13 trustee about this development but that the trustee
10   did not seek payroll information from Mr. Martin.    According to
11   Mr. McCarthy, Mr. Martin’s income was a moving target.
12        Mr. McCarthy also argued that Debtors’ increased income and
13   reasonable expenses showed an after-tax income of $1,790 per
14   month; yet, Debtors proposed only a $400 per month increase in
15   the plan payment.   Mr. McCarthy further asserted that there was
16   no justification or explanation as to why the difference of
17   $1,390 was not included in the plan.   Finally, Mr. McCarthy
18   objected to numerous increased expenses relating to cell phones,
19   food, clothing and personal care.
20        The court scheduled an evidentiary hearing for September 3,
21   2014.   Mr. McCarthy moved for a continuance and to compel
22   discovery related to Debtors’ income and expenses.   On
23   September 2, 2014, Debtors filed a notice withdrawing the motion
24   to modify their confirmed plan.   Eight days later, the
25   bankruptcy court ordered a 2004 examination of Mr. Martin’s
26   employer, Western Partitions, and Ms. McCarthy’s employer,
27   DM2 Software.   In response, Debtors filed fifth amended
28   Schedules I and J stating higher income for Mr. Martin.

                                    -8-
 1        4.     Postconfirmation Modification:    Fourth Amended Plan
 2        Debtors filed a fourth amended plan dated September 27,
 3   2014, and again moved to modify their plan due to increased
 4   income and expenses.    This plan showed payments in the amount of
 5   $40,209.28 through September 2014, $633 per month for six months
 6   commencing October 2014, and $2300 per month thereafter.      The
 7   plan indicated that Debtors would pay $73,402 to nonpriority
 8   unsecured claims for a return of 27.3% on their allowed claims.
 9        Debtors also moved for permission to incur debt for the
10   purchase of a second new car.    They declared that the Kia was
11   not driveable and disclosed that they sold the car to a repair
12   shop for $2,000.    The sale price, according to Debtors, was the
13   amount Ms. McCarthy was offered for the Kia as a trade-in.
14        Mr. McCarthy again objected to Debtors’ fourth amended
15   plan.     He complained that Debtors’ amended Schedule J increased
16   most of their expenses without showing any change in
17   circumstances to support the increases.      Mr. McCarthy also
18   objected to Mr. Martin’s child support obligation which was
19   listed as an expense in an amended Schedule J for the first
20   time.     Finally, Mr. McCarthy argued that Debtors did not need a
21   another new vehicle.
22        The chapter 13 trustee supported Debtors’ requested
23   modification.    The trustee noted that Debtors voluntarily
24   increased their monthly plan payment (from $2,307.00 to
25   $2,676.92) in May 2014, following their disclosure of increased
26   income.    The trustee also supported Debtors’ request to purchase
27   a new car.    Finally, the trustee informed the court that
28   Debtors’ request to temporarily allocate $1,667.00 per month for

                                      -9-
 1   appellate attorney fees was necessitated by Mr. McCarthy’s
 2   conduct because the underlying appeal was being prosecuted by
 3   him and not by Debtors.
 4           On November 4, 2014, the bankruptcy court held a hearing on
 5   the matter.     The bankruptcy court allowed a reduction in the
 6   plan payments, granted Debtors’ request to employ an appellate
 7   attorney for the pending state court appeal, and allowed
 8   Mr. Martin to make his child support payment.     The bankruptcy
 9   court made no rulings with respect to other issues raised by
10   Mr. McCarthy relating to Debtors’ expenses.     Those issues were
11   reserved for a later evidentiary hearing.
12           On November 20, 2014, the bankruptcy court entered an order
13   modifying Debtors’ chapter 13 plan.     The court ordered that on
14   the effective date of the plan, October 1, 2014, their monthly
15   payment obligation was reduced to $1124 per month to reflect
16   Debtors’ ongoing legal fee expenses.     The court further ordered
17   that Debtors could submit a request for a vehicle purchase
18   which, upon trustee approval, could result in further reduction
19   of Debtors’ plan payment obligation.     Finally, the court ordered
20   that Mr. Martin’s ongoing child support obligation was approved
21   as an allowable expense.6
22           Debtors subsequently obtained a court order authorizing
23   them to purchase a new vehicle.
24           5.   Mr. McCarthy’s Motion to Dismiss
25           On December 31, 2014, Mr. McCarthy filed an updated motion
26
27
         6
          According to Mr. Martin, the state court ordered him to
28 pay $1,328 a month in child support effective October 1, 2014.

                                      -10-
 1   to dismiss Debtors’ case with prejudice, alleging bad faith.     He
 2   argued that (1) Debtors misrepresented facts in their petition
 3   and supporting schedules; (2) Debtors commenced the case to
 4   defeat state court litigation, i.e., enforcement of the $224,000
 5   judgment; (3) Debtors exhibited bad faith in the continuing
 6   manipulation of their income and living expenses schedules,
 7   seeking to minimize their apparent, disposable income
 8   commitment; (4) Debtors disposed of personal property, the Kia,
 9   without court authority and without a timely accounting of such
10   disposal to the court; (5) Debtors concealed Mr. Martin’s income
11   from the court and the trustee; (6) Debtors routinely inflated
12   and misstated their Schedule J living expenses; (7) Debtors
13   evaded discovery of their income and expenses; (8) Debtors
14   appeared to have filed a materially false Form 1040 income tax
15   return for 2013; and (8) Ms. McCarthy improperly used her
16   company credit card for personal expenses which increased her
17   debt.   Based on these allegations, Mr. McCarthy argued that
18   Debtors’ conduct was “egregious”, warranting dismissal of their
19   case with prejudice under the factors set forth in Leavitt.
20        The chapter 13 trustee supported dismissal if the
21   allegations were proved at an evidentiary hearing.
22        In opposition, Debtors maintained that most of the issues
23   raised by Mr. McCarthy were previously adjudicated.    They
24   further explained that Mr. Martin was unemployed at the time of
25   confirmation and receiving unemployment benefits.    They
26   explained that his income increased postconfirmation because
27   Mr. Martin was assigned to a project in Beaverton, Oregon.     At
28   the beginning of December 2013 he was laid off for one week and

                                    -11-
 1   then dispatched for work in Pullman, Washington and then to
 2   Moscow, Idaho.   Debtors maintained that they provided evidence
 3   of Mr. Martin’s income to the trustee on February 24, 2014.
 4        Debtors also explained their “alleged” fraudulent tax
 5   returns contained errors and had been corrected by a CPA.    They
 6   further argued that Ms. McCarthy’s use of her company’s credit
 7   card was authorized as her employer allowed her to use the card
 8   for non-business expenses during her travel and those amounts
 9   were reimbursed to her employer.
10        As explained below, Mr. McCarthy’s motion to dismiss was
11   scheduled for an evidentiary hearing at the same time as
12   Debtors’ request to further modify their confirmed plan and to
13   resolve outstanding issues related to their fourth amended plan.
14        6.   Postconfirmation Modification:   Fifth Amended Plan
15        Debtors filed a fifth amended plan dated March 23, 2015,
16   based on increased income and expenses.    They also filed amended
17   Schedules I and J.   In the fifth amended plan, they proposed
18   payments of $1124 for six months, then $1,044 for two months,
19   and then had payments resume at at $2711 per month.   This plan
20   showed that Debtors would pay at least $85,665 to nonpriority
21   unsecured claims which was approximately 32.43% of their allowed
22   claims.
23        On April 28, 2015, Mr. McCarthy objected to the fifth
24   amended plan on several grounds including, among others, that
25   Debtors were not acting in good faith in either the filing of
26   their case or the proposal of their modified plan.    He further
27   complained that Debtors had understated Mr. Martin’s income and
28   Ms. McCarthy’s earnings by omitting bonus payments made to her

                                    -12-
 1   which averaged $500 per month from December 2013 through January
 2   2015.        Finally, he pointed out that Debtors’ 2013 and 2014 tax
 3   returns showed that Debtors improperly took deductions.       As a
 4   result, Mr. McCarthy asserted that Debtors owed over $23,000 in
 5   taxes for those years.       Mr. McCarthy also alleged that Debtors
 6   intentionally under-withheld taxes and spent the extra income
 7   which, in turn, created a large postpetition obligation that
 8   diverted disposable income from their creditors.
 9           7.     The Evidentiary Hearing
10           An evidentiary hearing on Mr. McCarthy’s motion to dismiss
11   and Debtors’ motion to modify their plan commenced on May 6,
12   2015, and continued on September 1-2, 2015.       At the May hearing,
13   Ms. McCarthy testified concerning various issues including her
14   use of her employer’s company credit card for personal expenses
15   and discrepancies on her tax returns.7
16           Mr. Ford, the owner of the repair shop that purchased the
17   Kia, also testified.       He testified that the car was not safe to
18   drive, that he quoted a price of $1,500 minimum to make the car
19   safe, and that he purchased the car for $2,000 and sold it for
20   $4,700 once it was in salable condition.       To make it salable,
21   Mr. Ford replaced the brakes and put two new tires on the car.
22           Mr. Burkard, a fifty percent owner of DM2 Software, Inc.,
23   testified that there was no prohibition to Ms. McCarthy using
24   the company credit card for personal expenses at the time she
25   incurred those expenses.       Since then, the company changed its
26
27
         7
          The transcripts contain only excerpts of the witness’s
28 testimony.

                                         -13-
 1   policy and now prohibits employees from charging non-business
 2   expenses on the credit card.   He also testified as to the amount
 3   of Ms. McCarthy’s bonuses and indicated that they were likely to
 4   continue.
 5        Finally, Mr. Erickson, the CPA who prepared Debtors’ tax
 6   returns, testified as to how he identified errors on Debtors’
 7   2013 tax return and prepared their 2014 tax return.
 8   Mr. Erickson testified that Debtors appeared to owe several
 9   thousand dollars over the amount they had withheld for 2014
10   taxes.   He also testified that he had made errors himself on the
11   returns which were based on Debtors’ representations.
12        On September 1, 2015, Mr. Martin testified about his
13   employment in 2013.   He did not recall whether he worked for
14   Western Partitions, his employer, for the bulk of that year.
15        On September 2, 2015, Mr. Martin testified that he no
16   longer had the $2,000 from the sale of the Kia.   He was also
17   questioned about $3,250 that Debtors spent on rental cars from
18   Hertz after they sold the Kia for $2,000.   Although Mr. Martin
19   said he could not recall the brands of the cars that were
20   rented, he later recalled that at one point it was a Dodge
21   minivan and at another point a GMC pick-up truck.   He also could
22   not recall how long the cars had been rented for.   Mr. Martin
23   further testified that Debtors had not saved any money for a
24   down payment on a new car.
25        Mr. Martin conceded that it was error to claim one of the
26   McCarthy’s sons as an exemption on their tax return and further
27   testified that it was error to claim a $5,000 deduction for a
28   contribution to an IRA account since he had no such account in

                                    -14-
 1   2013.
 2        Mr. Martin further testified that Debtors continued to send
 3   their daughter to a private school for $600 a month because the
 4   school offered a higher quality education than the public
 5   school.
 6        Finally, Mr. Martin testified that he was delinquent in his
 7   support payments but was not certain as to how many months.
 8        Mr. McCarthy also testified that Mr. Martin was four months
 9   delinquent in his support payments.   He further opined that
10   Debtors budgeted $2,000 more than necessary for the payment of
11   attorney’s fees to Ms. McCarthy’s state court lawyer.
12        Closing arguments were held on September 14, 2015.
13   Debtors’ counsel argued that dismissal was not necessary and
14   that there were other remedies available to the court besides
15   dismissal with prejudice.   Counsel noted that a six month bar to
16   re-filing would force Debtors to forego over $60,000 and
17   29 months of progress towards discharge.   Counsel also noted
18   that Mr. McCarthy would be able to execute on his judgment over
19   the course of the next six months and observed that he would
20   collect a greater portion of the payments in a subsequent
21   chapter 13 because Debtors’ child support obligation to him
22   would run its course over the next few years.   Finally, counsel
23   argued that the court should not dismiss Debtors’ case but
24   requested that any dismissal be without prejudice.
25        Counsel for the chapter 13 trustee represented that the
26   trustee supported dismissal of the case based on his view that
27   Debtors had not really approached the bankruptcy with an eye
28   towards reorganization of their personal finances.   The trustee

                                    -15-
 1   also thought that Debtors were not truthful as to their income
 2   despite repeated opportunities to disclose to the trustee
 3   exactly what they expected in the future.     According to the
 4   trustee, evidence of any additional income had to be obtained
 5   through repeated discovery requests.     Finally, the trustee
 6   opined that the case was a two-party dispute with no end in
 7   sight.    He qualified his support of dismissal, however, by
 8   observing that Debtors may have presented a sufficient argument
 9   against dismissal with prejudice or suggested that a lesser
10   sanction would be appropriate.
11        The court took the matter under advisement.
12        8.     The Bankruptcy Court’s Order
13        On October 21, 2015, the bankruptcy court issued its
14   findings of fact and conclusions of law in an order dismissing
15   Debtors’ case without prejudice and denying Debtors’ motion to
16   modify their plan.
17               1.    Findings of Fact
18        Income:     The court found that Debtors had understated or
19   failed to effectively disclose their income.     Based on the
20   evidence, the court noted that Ms. McCarthy did not report her
21   bonus income of $8,943 to the chapter 13 trustee or in Debtors’
22   amended schedules and that Debtors had understated Mr. Martin’s
23   income by over $20,000 for the postconfirmation period of
24   November 2013 to September 2014.
25        Sale of the Kia:     Although there was some question whether
26   Ms. McCarthy sold the Kia prior to obtaining court approval, the
27   court did not find that important.      The court noted that Debtors
28   received approval from the trustee in January 2015 for the

                                      -16-
 1   purchase of a new vehicle and that since March 2015, their
 2   schedules showed a $350 a month deduction for a new car payment.
 3   However, Debtors testified at the evidentiary hearing that they
 4   took the $2,000 from the sale, deposited it into their bank
 5   account and spent it in the ordinary course.   Mr. Martin
 6   testified that they have been unable to buy another vehicle
 7   since they no longer had funds for a down payment.
 8        Tax Returns:   The bankruptcy court found that the evidence
 9   showed that Debtors owed over $23,000 in taxes for the 2013 and
10   2014 tax years because they had claimed numerous improper
11   deductions.   Although Ms. McCarthy had testified that she found
12   the tax software confusing when she prepared Debtors’ original
13   tax returns, the court did not find her testimony credible when
14   her job was associated with computer software in the petroleum
15   industry.   The court opined that had Debtors filed the 2013
16   return with the properly claimed deductions, they would likely
17   have been able to modify their plan to reflect the need to pay
18   the resulting tax liability, with little adverse consequence.
19   The court observed that Debtors’ “irresponsible claims of
20   deductions . . . simply played into the hands of Mr. McCarthy.
21   They certainly should have expected that Mr. McCarthy would have
22   scrutinized their return.”
23        Company Credit Card:    The court found Ms. McCarthy’s use of
24   her company credit card to pay for her father’s airline ticket
25   on two occasions so that he could accompany her in her travel
26   was de minimis and not prohibited by the company at the time the
27   expenses were incurred.
28        Expenses.   The court also noted that the costs associated

                                     -17-
 1   with Debtors’ daughter’s private schooling was $600 per month
 2   which was above the National standard of $156.    The court
 3   observed that Debtors had claimed the expense only since March
 4   2014 and that they maintained that their daughter needed to
 5   attend the private school as a public school would hold her back
 6   educationally.
 7        Next, the court addressed Mr. Martin’s child support
 8   obligation, noting that prior to confirmation, Debtors never
 9   listed any child support owed by him.    The court also noted that
10   no documentation regarding Mr. Martin’s support obligation was
11   put into evidence, but he testified that the obligation was
12   imposed in October 2014 and that Debtors made the payment from
13   their bank account but are frequently delinquent on the payment.
14        Spending Habits.   Last, the court noted that there had been
15   extensive examination and testimony about Debtors’ expenses and
16   spending habits.   There was evidence showing vacations, five
17   phone lines, and that Debtors ate out a substantial amount of
18   the time with almost daily purchase of fast food.    The court
19   found that the bank statements put into evidence by Mr. McCarthy
20   showed Debtors were constantly overdrawn on their accounts.      In
21   light of this evidence, the bankruptcy court found that there
22   was no indication that Debtors attempted to rein in their
23   spending and reorganize in good faith.
24        In the end, the bankruptcy court found that Debtors were
25   not forthcoming about disclosing either their income or their
26   actual expenses.   The court concluded that it was clear they
27   could not obtain financial stability even with the increased
28   income and improper claims of tax deductions.    However, the

                                    -18-
 1   court also found that Mr. McCarthy was equally to blame “for
 2   this debacle.”    The court noted that he closed his accounting
 3   practice and unsuccessfully argued in state court and on appeal
 4   that Ms. McCarthy was obligated to pay higher child support for
 5   him to stay at home with their sons, who are both teenagers.
 6   See McCarthy v. McCarthy, 2015 WL 5139089 (Wash. Ct. App.
 7   Sept. 1, 2015).    The court further observed that Mr. McCarthy
 8   spent much of his time scrutinizing Debtors’ income and spending
 9   habits and preparing exhaustive spreadsheets showing the
10   Debtors’ income and expenses.
11        The bankruptcy court reiterated that Debtors ended up
12   confirming a plan which proposed payments to unsecured
13   creditors, primarily Mr. McCarthy, which exceeded what they
14   would have had to pay if they had properly calculated their
15   projected disposable income as above median debtors from the
16   outset.   The court observed that Debtors had been making
17   substantial payments to the chapter 13 trustee under their plan
18   which resulted in substantial distributions to Mr. McCarthy over
19   and above the ongoing child support obligation.
20              2.     Legal Conclusions
21        In its legal conclusions, the bankruptcy court first noted
22   that although it had found in the November 2013 confirmation
23   hearing that Debtors had proposed their plan in good faith, the
24   court could review that finding postconfirmation if new
25   information had come to light.    See In re Luxford, 368 B.R. 63,
26   70-71 (Bankr. D. Mont. 2007) (considering trustee’s post
27   confirmation motion to dismiss for lack of good faith after
28   discovering that debtors had confirmed a plan based on fraud,

                                      -19-
 1   where debtors had purposely omitted assets and transactions from
 2   their schedules and statements such that the Chapter 13 plan did
 3   not actually meet the best interests of creditors test of
 4   § 1325(a)(4)).
 5          Accordingly, the court considered again the four factors of
 6   the Leavitt test to determine whether, under the totality of the
 7   circumstances, Debtors were acting in good faith.     These factors
 8   are:    (1) whether the debtor misrepresented facts in his
 9   petition or plan, unfairly manipulated the Code, or otherwise
10   filed his petition or plan in an inequitable manner; (2) the
11   debtor's history of filings and dismissals; (3) whether the
12   debtor intended to defeat state court litigation; and
13   (4) whether egregious behavior is present.     In re Luxford,
14   368 B.R. at 70.    In considering these factors, the court noted
15   dismissal turned on the first and the fourth factors because it
16   had previously found the second and third factors were not met
17   in its findings on confirmation of Debtors’ second amended plan.
18   The bankruptcy court found that nothing presented at the May and
19   September 2015 hearings changed those findings.
20          First Leavitt Factor:   As to misrepresentation of facts,
21   unfair manipulation of the Bankruptcy Code and/or the filing of
22   a plan in an inequitable manner, the court found that the most
23   glaring example was the understatement of both Mr. Martin’s and
24   Ms. McCarthy’s income to the tune of almost $30,000.     Ms.
25   McCarthy’s bonuses were not disclosed, and Mr. Martin was listed
26   as unemployed when he was in fact employed.     The court observed
27   that early in 2013 Mr. Martin’s income may have been sporadic
28   due to the economy, but his situation had improved.     The court

                                      -20-
 1   noted that even when his employment was disclosed, the earnings
 2   were understated.
 3           According to the bankruptcy court, Debtors similarly
 4   misrepresented many of their expenses.     The court observed that
 5   Debtors’ bank account statements which showed how Debtors spent
 6   their money, little resembled their Schedule J.     The court found
 7   that, rather than using funds on hand to make a down payment and
 8   buy a new vehicle as the Court approved, they used the $2,000
 9   from the sale of the Kia for day to day expenses and then wasted
10   another $3,250 renting brand new cars from Hertz.     “Their $350
11   per month budget item for the purchase of a new car remains,
12   nine months after the purchase was approved, a fiction.”       The
13   court also noted that Debtors never demonstrated that Mr. Martin
14   had an actual monthly support obligation of $1328 nor did they
15   identify with any accuracy how or when that obligation was paid.
16   Finally, the court observed that Debtors had not budgeted for
17   the hundreds of dollars a month they incurred in overdraft fees
18   from their bank as a result of the irresponsible spending
19   habits.8    In the end, the bankruptcy court concluded that
20   Debtors’ schedules did not accurately reflect their actual
21   spending.     Thus, this factor weighed in favor of dismissal.
22           Fourth Leavitt Factor:   Next, the court considered whether
23   egregious behavior was present.     The court acknowledged that
24   Debtors had not properly disclosed their income and expenses,
25   had been irresponsible in some of their spending habits, and had
26
         8
27        In closing argument, Mr. McCarthy’s attorney argued that
   for the period of January 1 through April 31, 2015, Debtors’
28 average monthly overdraft was $419 a month.

                                       -21-
 1   filed initial tax returns which plainly and simply misstated
 2   their deductions.   However, weighing against these facts was
 3   that Debtors were not living a luxurious lifestyle, and the
 4   court also noted they had been making substantial plan payments
 5   - likely more than they would have had to pay if they had
 6   properly filled out the Form B22C from the outset.    The court
 7   further observed that Debtors were subjected to constant and
 8   unremitting scrutiny from Mr. McCarthy in their case and his
 9   continued efforts in the state court to contest matters arising
10   from the dissolution of the McCarthys’ marriage.    These efforts,
11   although unsuccessful, required Ms. McCarthy to incur additional
12   attorney’s fees.    On balance, the court concluded that Debtors’
13   behavior was not egregious.
14        Based upon the totality of the circumstances, the
15   misstatement of income and expenses and, as mentioned by the
16   chapter 13 trustee, a failure to demonstrate the kind of
17   responsible spending that is required in a Chapter 13 case, the
18   court found “cause” to dismiss Debtors’ case under § 1307(c).
19   The court concluded however that Debtors’ conduct did not rise
20   to the level warranting dismissal with prejudice.
21        Mr. McCarthy filed a timely notice of appeal from this
22   order.
23                            II.   JURISDICTION
24        The bankruptcy court had jurisdiction over this proceeding
25   under 28 U.S.C. §§ 1334 and 157(b)(2)(A).     We have jurisdiction
26   under 28 U.S.C. § 158.
27                               III.   ISSUE
28        Whether the bankruptcy court abused its discretion by not

                                     -22-
 1   dismissing Debtors’ chapter 13 bankruptcy case with prejudice.
 2                          IV.   STANDARDS OF REVIEW
 3        We review the bankruptcy court’s case dismissal for an
 4   abuse of discretion.    In re Leavitt, 171 F.3d at 1222-23.
 5        To determine whether the bankruptcy court has abused its
 6   discretion, we conduct a two-step inquiry: (1) we review de novo
 7   whether the bankruptcy court “identified the correct legal rule
 8   to apply to the relief requested” and (2) if it did, whether the
 9   bankruptcy court’s application of the legal standard was
10   illogical, implausible or “without support in inferences that
11   may be drawn from the facts in the record.”        United States v.
12   Hinkson, 585 F.3d 1247, 1261–62 & n. 21 (9th Cir. 2009)
13   (en banc).   “If the bankruptcy court did not identify the
14   correct legal rule, or its application of the correct legal
15   standard to the facts was illogical, implausible, or without
16   support in inferences that may be drawn from the facts in the
17   record, then the bankruptcy court has abused its discretion.”
18   USAA Fed. Sav. Bank v. Thacker (In re Taylor), 599 F.3d 880,
19   887–88 (9th Cir. 2010) (citing Hinkson, 585 F.3d at 1261–62).
20        When a bankruptcy court makes factual findings of bad faith
21   to support dismissal of a chapter 13 case, we review those
22   findings for clear error.     In re Leavitt, 171 F.3d at 1222-23.
23   Whether or not a debtor’s conduct rose to the level of
24   egregiousness is a question of fact.     A court’s factual
25   determination is clearly erroneous if it is illogical,
26   implausible, or without support in the record.        Hinkson,
27   585 F.3d at 1261-62 & n.21.     Under this standard, “[w]here there
28   are two permissible views of the evidence, the fact finder’s

                                       -23-
 1   choice between them cannot be clearly erroneous.”     Anderson v.
 2   City of Bessemer City, N.C., 470 U.S. 564, 574 (1985).
 3                              V.   DISCUSSION
 4   A.   Legal Standards:   Dismissal and Dismissal With Prejudice
 5        Section 1307(c) sets forth nonexclusive grounds which may
 6   constitute cause for dismissal of a chapter 13 case.     Although
 7   not specifically listed, bad faith is a “cause” for dismissal
 8   under § 1307(c).    Eisen v. Curry (In re Eisen), 14 F.3d 469, 470
 9   (9th Cir. 1994).    In this Circuit, bankruptcy courts make good
10   faith determinations on a case-by-case basis, after considering
11   the totality of the circumstances.      In re Leavitt, 171 F.3d at
12   1124.   In addition, a “‘court must make its good-faith
13   determination in the light of all militating factors.’”     Ho v.
14   Dowell (In re Ho), 274 B.R. 867, 876 (9th Cir. BAP 2002) (citing
15   Goeb v. Heid (In re Goeb), 675 F.2d 1386, 1390 (9th Cir. 1982)).
16        Section 349(a) expressly grants the bankruptcy court
17   authority to dismiss a case with prejudice.     In re Leavitt,
18   171 F.3d at 1123.   A dismissal with prejudice is a severe and
19   drastic sanction that is limited to extreme situations:
20   “Generally, only if a debtor engages in egregious behavior that
21   demonstrates bad faith and prejudices creditors—for example,
22   concealing information from the court, violating injunctions, or
23   filing unauthorized petitions—will a bankruptcy court forever
24   bar the debtor from seeking to discharge then existing debts.”
25   In re Chabot, 411 B.R. 685, 705 (Bankr. D. Mont. 2009) (citing
26   Colonial Auto Ctr. v. Tomlin (In re Tomlin), 105 F.3d 933, 937
27   (4th Cir. 1997)); see also Ellsworth v. Lifescape Med. Assocs.,
28   P.C. (In re Ellsworth), 455 B.R. 904, 922 (9th Cir. BAP 2011)

                                      -24-
 1   (acknowledging that dismissal with prejudice is a drastic remedy
 2   reserved for “extreme situations.”).     Dismissal with prejudice
 3   imposes a bar on further bankruptcy proceedings between the
 4   parties and is a complete adjudication of the issues.
 5   In re Leavitt, 171 F.3d at 1123.    “Functionally, then, a
 6   dismissal with prejudice is equivalent to a judgment under §
 7   523(a) that each debt that would have been discharged under the
 8   debtor’s plan is thereafter nondischargeable.”     In re Ellsworth,
 9   455 B.R. at 922.
10        In deciding whether to dismiss a case with prejudice,
11   Leavitt directs the bankruptcy court to consider the same four
12   factors for dismissal based on “cause” and make a finding of bad
13   faith based on egregious conduct.     171 F.3d at 1224.   “The court
14   is not obligated to count the four Leavitt factors as though
15   they present some sort of a box-score but rather is to consider
16   them all and weigh them in judging the ‘totality of the
17   circumstances.’”   In re Lehr, 479 B.R. 90, 98 (Bankr. N.D. Cal.
18   2012).
19   B.   Analysis
20        Here, in considering dismissal of Debtors’ case in
21   conjunction with confirmation of Debtors’ modified plan, the
22   bankruptcy court correctly examined the totality of the
23   circumstances and considered the four factors enunciated in
24   Leavitt to determine Debtors’ good faith.     See In re Luxford,
25   368 B.R. at 70-71; see also § 1329(b)(1) (incorporating good
26   faith standard under § 1325(a)(3) for modification of a
27   confirmed plan).   On appeal, Mr. McCarthy has not challenged the
28   legal standards that the bankruptcy court applied: instead, he

                                    -25-
 1   argues that the court’s factual findings on the Leavitt factors
 2   were erroneous or an abuse of discretion.    He also contends that
 3   reversal is warranted because neither Debtors nor the court
 4   provided any analysis for an alternative sanction which would
 5   have afforded him a sufficient remedy.    These errors, according
 6   to Mr. McCarthy, demonstrate that the court abused its
 7   discretion in dismissing this case without prejudice.
 8        We are not persuaded.   “The bankruptcy court is not
 9   required to find that each [Leavitt] factor is satisfied or even
10   to weigh each factor equally.”    Khan v. Curry (In re Khan),
11   523 B.R. 175, 185 (9th Cir. BAP 2014).    Rather, “[t]he factors
12   are simply tools that the bankruptcy court employs in
13   considering the totality of the circumstances.”    Id.   By
14   applying the Leavitt factors in a totality of circumstances
15   analysis, the bankruptcy court, as the trier of fact, determines
16   whether there is “cause” for dismissal for bad faith and whether
17   such dismissal should be with prejudice based on the debtor’s
18   egregious conduct.   Here, the bankruptcy court applied the
19   correct legal standards and only its factual findings are at
20   issue.   The court explicitly found that under the four factor
21   test for determining bad faith set forth in Leavitt, only one of
22   the four factors was present; i.e., factor one.
23        The First Leavitt Factor:    this factor questions whether
24   Debtors misrepresented facts in the petition or plan, unfairly
25   manipulated the Code, or otherwise filed their petition or plan
26   in an inequitable manner.    The bankruptcy court found numerous
27   misrepresentations regarding Debtors’ income and expenses and
28   found that this factor weighed in favor of dismissal.     Nowhere

                                      -26-
 1   does Mr. McCarthy argue with any specificity why the court’s
 2   findings related to this factor were erroneous.   Based on our
 3   review of the record, we conclude that the bankruptcy court’s
 4   findings under this factor were plausible and supported by
 5   inferences drawn from the facts in the record and thus not
 6   erroneous.
 7        The Second Leavitt Factor:   This factor looks at the
 8   history of filings and dismissals of prior bankruptcy cases.     “A
 9   debtor’s history of filings and dismissals is relevant” to the
10   bad faith analysis.   Nash v. Kester (In re Nash), 765 F.2d 1410,
11   1415 (9th Cir. 1985).   Here, the bankruptcy court afforded
12   Ms. McCarthy’s prior bankruptcy filing little weight in its bad
13   faith analysis because Ms. McCarthy had filed her chapter 7 case
14   and received her discharge while the dissolution case was
15   pending.   The bankruptcy court found her filing was
16   understandable given that Mr. McCarthy had received over $30,000
17   in sanctions against Ms. McCarthy during the dissolution
18   proceedings and the on-going animosity between the parties.
19        Mr. McCarthy does not challenge these findings on appeal.
20   Rather, he contends that the court erred by not considering
21   Debtors’ numerous filings in the case itself; i.e., they filed
22   three Form B22c’s all of which were false, seven sets of
23   Schedule I and J’s all of which falsely stated income and
24   expenses, and six plans, only one of which was confirmed due to
25   the court’s reliance on Debtors’ false testimony and Form B22c.
26   In other words, all Debtors’ filings and amendments were false.
27   These facts, however, do not make the bankruptcy court’s
28   findings on the second Leavitt factor clearly erroneous.

                                    -27-
 1        When evaluating the second Leavitt factor, a bankruptcy
 2   court is concerned with prior bankruptcy case filings and
 3   dismissals and not with filings within the case itself.
 4   Actually, Mr. McCarthy’s arguments about Debtors’ “merry-go-
 5   round” of amended filings in the case is intertwined with the
 6   court’s analysis under the first Leavitt factor; i.e., Debtors’
 7   misrepresentation of facts related to their income and expenses.
 8   Moreover, Mr. McCarthy ignores the bankruptcy court’s factual
 9   findings regarding Debtors’ initial schedules and Form B22c.
10   The court initially found that the “mistakes” were largely due
11   to the “sloppiness of Debtors’ attorney, abetted by Debtors,
12   neither of whom understood the basic strategy of chapter 13
13   practice applicable to their situation.”       In short, the
14   bankruptcy court’s findings on this factor were logical and
15   supported by inferences drawn from the facts in the record and,
16   thus, were not clearly erroneous.
17        The Third Leavitt Factor:    This factor examines whether
18   Debtors intended to defeat state court litigation.       The
19   bankruptcy court found that Debtors had not filed their petition
20   to defeat state court litigation.       Mr. McCarthy contends this
21   was error.   He points out that the facts in this case are
22   similar to the facts in Leavitt.    There, the debtor filed a
23   chapter 13 petition approximately two weeks after a judgment on
24   a jury verdict was entered against him and then he proposed zero
25   payment to unsecured creditors in his first plan and 3% in his
26   second plan.   According to Mr. McCarthy, Debtors filed their
27   petition just four days after Mr. McCarthy obtained his judgment
28   and Debtors’ original plan proposed paying unsecured creditors

                                      -28-
 1   2% and their amended plan proposed paying unsecured creditors
 2   3%.   He also asserts that this case is essentially a single
 3   creditor case since he represents 89% of all non-priority
 4   unsecured claims.
 5         Again, these arguments do not make the bankruptcy court’s
 6   findings under this factor clearly erroneous.    Mr. McCarthy
 7   ignores the bankruptcy court’s findings of fact under this
 8   factor and does not tell us why those findings are clearly
 9   erroneous.    As the bankruptcy court noted, the portion of the
10   McCarthy dissolution proceedings related to the $224,000
11   judgment was concluded when Debtors filed their case.    Since
12   Mr. McCarthy had threatened garnishment, the bankruptcy court
13   found it was not surprising that Debtors filed for bankruptcy
14   protection.   The court also found that Mr. McCarthy’s debt was
15   not the only debt sought to be addressed by Debtors’ case.
16   Although he was the largest unsecured creditor, Debtors had
17   issues with the large secured claim arising from their
18   prepetition purchase of the minivan.    Taken together, these
19   facts do not show that Debtors’ only purpose in filing was to
20   defeat the state court litigation.     See In re Eisen, 14 F.3d at
21   470 (bad faith exists where the debtor’s only purpose is to
22   defeat state court litigation).
23         Finally, the facts in Leavitt are distinguishable.   Unlike
24   Mr. Leavitt, Debtors confirmed a plan which paid 27% to
25   unsecured creditors.    In sum, the bankruptcy court’s findings on
26   this factor were logical and supported by inferences drawn from
27   facts in the record and thus were not clearly erroneous.
28         The Fourth Leavitt Factor:   This factor looks at whether

                                     -29-
 1   egregious behavior is present.    This factor is relevant to
 2   Mr. McCarthy’s request to dismiss this case with prejudice
 3   because under Leavitt the bankruptcy court must make a finding
 4   of bad faith based on egregious conduct.    The bankruptcy court
 5   properly noted that egregious behavior demonstrates bad faith
 6   and prejudices creditors, such as concealing information from
 7   the court, violating injunctions, filing unauthorized petitions,
 8   hiding or undervaluing assets, making post-petition payments to
 9   pre-petition creditors, violating non-bankruptcy laws or
10   otherwise demonstrating fraudulent conduct, without excuse.    See
11   In re Chabot, 411 B.R. at 704-705 (citing Leavitt, 171 F. 3d at
12   1223-24) and In re Cortez, 349 B.R. 608, 613-614 (Bankr. N.D.
13   Cal. 2006).
14        The bankruptcy court acknowledged that Debtors had not
15   properly disclosed their income and expenses, had been
16   irresponsible in some of their spending habits, and had filed
17   initial tax returns which plainly and simply misstated their
18   deductions.   However, in its totality of circumstances analysis,
19   the bankruptcy court also considered all mitigation factors.
20   See In re Ho, 274 B.R. at 876.    Those factors included:   Debtors
21   were not living a luxurious lifestyle; Debtors had been making
22   substantial plan payments - likely more than they would have had
23   to pay if they had properly filled out Form B22C from the
24   outset; and Debtors were subjected to constant and unremitting
25   scrutiny from Mr. McCarthy in their case and his ongoing efforts
26   in the state court to continue fights arising from the
27   dissolution of the McCarthys’ marriage.    On this last point, the
28   court observed that, although Mr. McCarthy was unsuccessful in

                                      -30-
 1   state court, his actions required Ms. McCarthy to incur
 2   additional attorney’s fees.    Accordingly, on balance, the court
 3   concluded that Debtors’ behavior was not egregious.
 4        With respect to this factor, Mr. McCarthy argues on appeal
 5   that Debtors’ conduct throughout this case cumulatively amounts
 6   to nothing less than egregiousness.     He further maintains that
 7   the bankruptcy court’s findings concerning his conduct should be
 8   stricken because the allocation of blame was without any factual
 9   basis.   We disagree with both contentions.
10        Mr. McCarthy’s arguments fail to appreciate the reality
11   that “bad faith” is a term which is used to describe a broad
12   range of improper conduct, only some of which is sufficient to
13   support the extreme sanction of dismissal with prejudice.       In
14   Leavitt, the Ninth Circuit held that dismissal with prejudice
15   must be coupled with a finding of bad faith based on egregious
16   conduct.   171 F.3d at 1224.   In other words, dismissal with
17   prejudice under § 349(a) is not meant to be a remedy for every
18   instance of debtor misconduct.
19        On the evidence before it, the bankruptcy court was not
20   persuaded that Debtors’ case was associated with sufficient bad
21   faith to justify dismissal with prejudice.     The bankruptcy court
22   applied the correct legal standards and, as noted above, its
23   factual findings were plausible and supported by inferences
24   drawn from the facts in the record.     We cannot reverse the
25   bankruptcy court’s findings of fact simply because we might have
26   decided the case differently.    “Where there are two permissible
27   views of the evidence, the fact finder’s choice between them
28   cannot be clearly erroneous.”    Anderson, 470 U.S. at 574.

                                      -31-
 1   Moreover, as already noted, the bankruptcy court was directed to
 2   consider all militating factors and therefore could properly
 3   consider Mr. McCarthy’s conduct throughout this case.
 4        Finally, Mr. McCarthy argues that the bankruptcy court
 5   abused its discretion by failing to consider alternative
 6   remedies to dismissal with prejudice as instructed by Ellsworth.
 7   Mr. McCarthy is mistaken.    First, in its findings and
 8   conclusions, the bankruptcy court expressly recognized that
 9   dismissal under § 1307(c) is a two-step process:    first the
10   court must determine whether there is cause for dismissal; then
11   there should be some consideration of whether a sanction less
12   than dismissal with prejudice is sufficient.    In re Ellsworth,
13   455 B.R. at 922.   “For example, the Court could simply dismiss a
14   case, or dismiss it with a 180 day (or some other length of
15   time) bar to re-filing.”    Id.   Therefore, the court approached
16   the question of dismissal with prejudice by recognizing the
17   two-step process and was well aware that lesser sanctions could
18   be imposed.
19        Second, the debtors in Ellsworth did not advocate for, or
20   present any evidence in support of, any alternative besides
21   dismissal with prejudice.    In contrast, Debtors here argued that
22   dismissal was not necessary, but they also pointed out that
23   there were other remedies available to the court besides
24   dismissal with prejudice.    In closing argument, counsel for
25   Debtors argued that a six month bar to re-filing would force
26   them to forego over $60,000 and twenty-nine months of progress
27   towards discharge.   Counsel also noted that Mr. McCarthy would
28   be able to execute on his judgment over the course of the next

                                       -32-
 1   six months but that he would collect a greater portion of the
 2   payments in a subsequent chapter 13 because Debtors’ child
 3   support obligation to him would run its course over the next few
 4   years.   Finally, counsel argued that the court should not
 5   dismiss Debtors’ case but, if it did dismiss, that it should
 6   dismiss without prejudice.     Therefore, alternatives to dismissal
 7   with prejudice were placed squarely before the bankruptcy court.
 8        Although Mr. McCarthy requested dismissal with prejudice,
 9   the court did not find sufficient bad faith to justify this
10   extreme result.   Therefore, it was unnecessary for the court to
11   further explore, much less analyze, whether alternative remedies
12   were appropriate.   Mr. McCarthy mistakenly complains that the
13   dismissal left him with no remedies at all when he has the full
14   array of state law rights at his disposal.    Moreover, from the
15   bankruptcy court’s comments, it is evident that Debtors paid
16   more to Mr. McCarthy than the amount required by the bankruptcy
17   code under their short-lived confirmed plan.
18        In sum, Mr. McCarthy offers no arguments on appeal that
19   demonstrate that the bankruptcy court’s dismissal of this case
20   without prejudice was an abuse of discretion.
21                            VI.    CONCLUSION
22        For the reasons stated above, we AFFIRM.
23
24
25
26
27
28

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