Case Summary:
Debtor filed a voluntary Chapter 12 petition on May 24, 2016. According to 11 U.S.C. § 1221, the Chapter 12 Plan was due on August 22, 2016. At a telephonic hearing, the United States Trustee raised a conflict of interest with respect to the Debtor’s attorneys. Accordingly, Debtor retained new counsel, but only after the prescribed time under § 1221 had lapsed. Debtor’s new counsel immediately moved for an extension to file a Plan. No party in interest moved to dismiss. The Court concluded Debtor clearly demonstrated that the need for an extension was attributable to circumstances beyond the Debtor’s control. Debtor could not file a plan in good faith due to a pending valuation hearing which was critical to the formulation of a plan. Debtor’s failure to file a timely plan was due to her prior counsel’s conflict of interest in representing her parents, which also affected her ability to formulate a plan. Finally, Debtor did not act in bad faith in the delay to file a plan as she retained substitute counsel once the apparent conflict was brought to light.

Statute/Rule References:
11 U.S.C. § 1208(c)(3) -- Dismissal for Failure to File a Plan Timely
11 U.S.C. § 1221 -- Filing of Plan

Key Terms:
Extension of Time to File Chapter 12 Plan