- Ag Docket
The debtor appealed the bankruptcy court’s determination that she was ineligible to be a Chapter 12 debtor. The debtor had filed a Chapter 7 "no-asset" bankruptcy in 2010 and was granted a discharge. The current action was filed four months after the debtor received a discharge in the Chapter 7 case. The total amount of debt on the debtor's ranch and other property exceeded the Chapter 12 debt limits by more than $4 million. The debtor argued that only the secured portion of the debt should be counted because her personal liability had been discharged in a Chapter 7 filing. The appellate court bankruptcy panel reviewed only whether the Chapter 12 debt limit counts secured debt only up to the value of collateral. The appellate court held that obligations that are enforceable against the debtor’s property but for which there is no personal liability are still “claims” and “debts” within bankruptcy. Thus, the debtor was not eligible to file Chapter 12 bankruptcy. In re Davis, No. 12-60069, 2015 U.S. App. LEXIS 2381 (9th Cir. Feb. 17, 2015), aff'g., In re Davis, No. CC-11-1692-MkDKi, 2012 Bankr. LEXIS 3631 (Bankr. 9th Cir. Aug. 3, 2012).
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