United States Court of Appeals 

For the Seventh Circuit 

Chicago, Illinois 60604 

Submitted April 2, 2020*

Decided April 2, 2020 

Before 

DIANE P. WOOD, Chief Judge 

JOEL M. FLAUM, Circuit Judge 

AMY C. BARRETT, Circuit Judge

No. 19-3199 

IN RE: DIAHANN GRASTY, 

Debtor-Appellant.

 Appeal from the United States District 

Court for the Northern District of Illinois, 

Eastern Division. 

No. 19-cv-3044 

Sharon Johnson Coleman, 

Judge. 

O R D E R 

After Diahann Grasty repeatedly failed to make payments required by her 

bankruptcy plan, the bankruptcy court dismissed her petition for material default. The 

district court affirmed the dismissal. On appeal, Grasty contends that the bankruptcy 

*

 The appellee (the bankruptcy trustee) notified the court that she is not 

participating in the appeal. We have agreed to decide this case without oral argument 

because the brief and record adequately present the facts and legal arguments, and oral 

argument would not significantly aid the court. FED. R. APP. P. 34(a)(2)(C). 

NONPRECEDENTIAL DISPOSITION 

To be cited only in accordance with Fed. R. App. P. 32.1 
No. 19-3199 Page 2 

court and district court were biased against her and that the bankruptcy court 

erroneously dismissed her case. Grasty’s arguments are meritless, so we affirm. 

Grasty filed a Chapter 13 bankruptcy petition in January 2018. (A Chapter 13 

bankruptcy allows a debtor to voluntarily propose a plan to reorganize her debts for 

repayment. 11 U.S.C. § 1322; Matter of Lisse, 921 F.3d 629, 638 (7th Cir. 2019).) Grasty 

initially proposed paying $30 per month for 60 months, but after amending her plan 

twice, she ultimately agreed to pay $84.26 per month for 60 months. The bankruptcy 

court confirmed this plan in June 2018. 

The trustee moved to dismiss the bankruptcy case five months later, contending 

that Grasty had not been making full payments under the plan, was in default, and 

owed over $400. In response, Grasty filed a motion for a hardship discharge, arguing 

that her financial situation had changed and requesting that her monthly payments be 

reduced to a more manageable amount. 

The bankruptcy court held a hearing to address these motions. Grasty admitted 

that she had not submitted a full payment every month as required by the plan. She 

also expressed confusion about the plan, including whether her payment obligations 

began when she first submitted the plan or when it was confirmed, and when her 

monthly payment had increased from $30 to $84.26. She also disputed (without 

evidence) the amount the trustee claimed she owed. 

The bankruptcy court first explained that Grasty had not demonstrated that she 

qualified for a hardship discharge under 11 U.S.C. § 1328(b), as she had not shown an 

inability to make payments. The court did, however, acknowledge Grasty’s confusion 

about her responsibilities under the plan and delayed ruling on the motion to dismiss. 

The court implored Grasty to work with the trustee to resolve her confusion and find a 

solution to her default. 

The court then conducted two more hearings, but Grasty continued to express 

confusion and request a hardship discharge. The court reiterated that Grasty had not 

proved that she qualified for the discharge. Recognizing Grasty’s lasting confusion, 

however, the court again delayed ruling on the trustee’s motion to dismiss and found a 

volunteer lawyer to assist Grasty. 

The bankruptcy court conducted three more hearings, with counsel for Grasty 

appearing at each one. At the sixth hearing, however, counsel moved to withdraw from 
No. 19-3199 Page 3 

representing Grasty because of irreconcilable differences and an inability to 

communicate with her about her options to cure the default. At that point, the 

bankruptcy court explained that it could no longer delay ruling on the motion to 

dismiss. Grasty had not proposed a viable alternative to the dismissal of her petition, 

and throughout the six months that the motion to dismiss had been pending, Grasty 

continued to miss payments and now owed approximately $700. The court therefore 

dismissed Grasty’s bankruptcy petition based on her default. See 11 U.S.C. § 1307(c)(6). 

Grasty appealed the dismissal of her case to the district court. She argued that 

the bankruptcy court erred by not granting her a hardship discharge, that the 

bankruptcy judge should have recused himself from the case, and that both the 

bankruptcy court and the district court lacked subject-matter jurisdiction over her case. 

The district court rejected Grasty’s contentions and concluded that the bankruptcy court 

did not abuse its discretion by dismissing her petition for material default. 

Now on appeal to this court, Grasty devotes most of her brief to arguing that 

both the district judge and the bankruptcy judge were biased and should have recused 

themselves from the case. But Grasty offers only allegations so unfounded and, at times, 

extreme, that we do not repeat them. She says nothing to suggest that either judge 

revealed favoritism or antagonism that made a fair judgment impossible. See Liteky v. 

United States, 510 U.S. 540, 555 (1994). Nor does the record reveal such bias. Grasty 

disagrees with the rulings against her, but “[a]dverse rulings do not constitute evidence 

of judicial bias.” Thomas v. Reese, 787 F.3d 845, 849 (7th Cir. 2015). 

Grasty also contends that the bankruptcy court wrongly dismissed her 

bankruptcy petition for material default. We review findings of fact for clear error and 

the dismissal of a bankruptcy petition for material default for abuse of discretion. 

See 11 U.S.C. § 1307(c)(6); In re Wiese, 552 F.3d 584, 588 (7th Cir. 2009). The bankruptcy 

court dismissed Grasty’s petition after finding that, at the time of the ruling, she had 

defaulted on her payment plan and was behind approximately $700 in plan payments. 

Grasty attempts to cast doubt on that conclusion by asserting, with no support, that she 

had been in default for less than one month and that the trustee lied about how much 

she owed. But she did not raise these arguments in the bankruptcy court and, what’s 

more, she acknowledged there that she was in default and had not adhered to her 

payment plan for several months. Grasty presents no basis on which we could conclude 

that the bankruptcy court’s finding of default was clearly erroneous or that it abused its 

discretion when dismissing her case. See In re Wiese, 552 F.3d at 588 (bankruptcy court 
No. 19-3199 Page 4 

abuses discretion when decision premised on incorrect legal principle or clearly 

erroneous factual finding). 

We have considered Grasty’s remaining arguments, and none has merit. 

AFFIRMED