Case ID: br_505/html/0622-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re Maximino A. SANTOS and Gloria S.L. Santos, Debtors, Maximino A. Santos and Gloria S.L. Santos, Appellants, v. Kathy A. Dockery, Chapter 13 Trustee and U.S. Trustee, Appellee.
    No. 12-55145.
    United States Court of Appeals, Ninth Circuit.
    Argued and Submitted Aug. 26, 2013.
    Filed Sept. 17, 2013.
    Hillary Coleman, Counsel, Ilya Boriso-vich Volk, Bankruptcy Counsel, Culver City, CA, Peter M. Lively, Bankruptcy Counsel, Los Angeles, CA, Law Office of Peter M. Lively, Louis J. Esbin, Esquire, Law Offices of Louis J. Esbin, Valencia, CA, for Appellant.
    Kathy A. Dockery, Angela N. Gill, Los Angeles, CA, U.S. Trustee, Esquire, Office of the U.S. Trustee, Los Angeles, CA, for Appellee.
    Before: O’SCANNLAIN and CHRISTEN, Circuit Judges, and COGAN, District Judge.
    
    
      
       The Honorable Brian M. Cogan, District Judge for the U.S. District Court for the Eastern District of New York, sitting by designation.
    
   MEMORANDUM

Maximino and Gloria Santos appeal the district court’s decision to affirm a bankruptcy court order establishing their ineligibility for Chapter 13 bankruptcy. This court reviews de novo a district court’s decision on appeal from a bankruptcy court. In re Focus Media, Inc., 387 F.3d 1077, 1081 (9th Cir.2004). We have jurisdiction pursuant to 28 U.S.C. § 158(d)(1), and we affirm.

The Santoses argue that they are eligible for Chapter 13 bankruptcy relief pursuant to 11 U.S.C. § 109(e) because they are seeking to discharge less than the statutory maximum in unsecured debt. We disagree. Chapter 13 eligibility is determined “by the debtor’s originally filed schedules, checking only to see if the schedules were made in good faith.” In re Scovis, 249 F.3d 975, 982 (9th Cir.2001). Under Scovis, debts are defined as “secured” or “unsecured” for Chapter 13 eligibility purposes by applying the standard set out in 11 U.S.C. § 506(a). Id. at 983. Under § 506(a), the Santoses’ three junior liens are readily categorized as unsecured because the property securing those debts is worth less than even the senior lien on the property. As such, the Santoses’ total unsecured debt, including junior liens, is more than the maximum permitted by statute.

The Santoses argue that their case is distinguishable from Scovis. We are not persuaded that the distinction between voluntarily incurred and involuntarily incurred liens distinguishes this case from Scovis, or that the voluntarily incurred nature of the Santoses’ debt otherwise changes the outcome.

The Santoses raise several public policy arguments regarding disparities between junior creditors and Chapter 13 debtors and between similarly-situated debtors. We leave these issues for Congress to decide.

Finally, because we find that the Santos-es are ineligible for Chapter 13 relief, we decline to reach the issue of whether they are eligible for a repayment plan shorter than 60 months.

AFFIRMED. 
      
       This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.