Davis v. U.S. Bank, No. 12-60069 (9th Cir. 2015)
Annotate this CaseDebtor appealed from the Bankruptcy Appellate Panel's decision affirming the bankruptcy court's dismissal of her voluntary Chapter 12 petition. The court affirmed the dismissal of debtor's petition because her "aggregate debts" exceeded $3,792,650, the statutory limitation for Chapter 12 eligibility in effect at the time debtor filed her petition pursuant to 11 U.S.C. 101(18)(A). The court concluded that a creditor's claims remains a "debt" so long as it is enforceable against either the debtor or the debtor's property. Accordingly, the debtor's "aggregate debts" include the amount of that claim, even after a prior discharge from personal liability under Chapter 7. In this case, debtor's schedules lists claims totaling $4.1 million, which is above the cap for Chapter 12 eligibility in effect at the time of her petition.
Court Description: Bankruptcy. On appeal from a decision of the Bankruptcy Appellate Panel, the panel affirmed the bankruptcy court’s dismissal of a petition under chapter 12 of the Bankruptcy Code. The panel held that the appellant was ineligible to be a chapter 12 debtor because her “aggregate debts” exceeded the statutory limitation of $3,792,650. The panel held that appellant’s “aggregate debts” included unsecured portions of creditors’ claims, even though those liabilities had been discharged in an earlier chapter 7 proceeding, because a creditor’s claim remains a “debt” so long as it is enforceable against either the debtor or the debtor’s property.
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