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*This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8013-1.

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-11-1692-MkDKi

)

CAROLYN L. DAVIS, ) Bk. No. ND 11-10994-RR

)

Debtor. )

______________________________)

)

CAROLYN L. DAVIS, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

BANK OF AMERICA, N.A.; ONEWEST)

BANK; ELIZABETH F. ROJAS, )

Chapter 12 Trustee, )

)

Appellees. )

______________________________)

Argued and Submitted on July 19, 2012

at Pasadena, California

Filed – August 3, 2012

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Robin L. Riblet, Bankruptcy Judge, Presiding 

Appearances: Jerry Namba of the Law Office of Jerry Namba

argued on behalf of Appellant Carolyn L. Davis;

Ellen Cha of Pite Duncan, LLP argued on behalf of

Appellee Bank of America, N.A.; Mark D. Estle of

the Estle Law Firm argued on behalf of Appellee

OneWest Bank. 

Before: MARKELL, DUNN and KIRSCHER, Bankruptcy Judges.

FILED

AUG 03 2012

SUSAN M SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
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1Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all “Rule” references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037.

2United States Bankruptcy Court for the Central District of

California, chapter 7 case no. ND 10-13744-RR.

3

Davis listed no unsecured debt in her schedules because she

had obtained her chapter 7 discharge only a few months earlier.

4

There was a fourth parcel of real property that Davis

listed, located in Atascadero, California. Davis represented

that the Atascadero parcel was essentially worthless. In any

event, the Atascadero parcel is not relevant to our analysis,

inasmuch as it was not encumbered by any liens.

2

INTRODUCTION

Debtor Carolyn Davis (“Davis”) appeals from the bankruptcy

court’s order determining that she was ineligible to be a debtor

in a chapter 121

 bankruptcy case and dismissing her case. We

AFFIRM.

FACTS

The controlling facts are undisputed. This is Davis’s

second bankruptcy case. In July 2010, she filed a no-asset

chapter 7 bankruptcy case,2 and she was granted a discharge in

November 2010. Davis commenced her current bankruptcy case by

filing a chapter 12 bankruptcy petition in March 2011. Elizabeth

Rojas (“Trustee”) was appointed to serve as chapter 12 trustee. 

In her schedules accompanying her chapter 12 petition, Davis

listed over $4.1 million in secured debt.3

 According to her

schedules, Davis owned three parcels of real property of

significant value:4 (1) a ranch located in Paso Robles,

California (“Ranch”), (2) a residence located in Cayucos,

California (“Residence”) and (3) a triplex located in Paso
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5

This debt limit is periodically adjusted pursuant to § 104. 

It was last adjusted, from $3,544,525 to $3,792,650, effective

April 1, 2010.

3

Robles, California (“Triplex”). According to Davis, at the time

of her chapter 12 filing, the Ranch was worth $614,000 and was

encumbered by a first trust deed in the amount of $2,663,190 and

an equity line of credit in the amount of $254,911. Meanwhile,

Davis valued the Residence at $670,000, and stated that it was 

encumbered by a first trust deed in the amount of $784,793 and 

an equity line of credit of $90,086. As for the Triplex, Davis

valued it at $350,000 and listed a first trust deed encumbering

it in the amount of $369,630. In addition to these secured

debts, Davis listed property tax liens in the aggregate amount of

roughly $9,500.

On its face, the total amount of debt Davis scheduled – 

$4,172,116 – exceeds the aggregate debt limit for chapter 12

cases set forth in § 101(18). That section provides in relevant

part that the term “family farmer” means an “individual . . .

whose aggregate debts do not exceed $3,792,650 . . . .”5

 In

turn, only “family farmers” and “family fisherman” (as those

terms are defined in § 101(18) and 101(19A)) are eligible to be

debtors under chapter 12. See § 109(f).

In June 2011, Davis filed her chapter 12 plan, in which she

proposed to pay the allowed amount of her secured debt over a

period of 30 years. Each creditor holding an allowed secured

claim would be paid interest only for the first three years at a

rate of 3.35%, with both interest and principal payments

thereafter, amortized over the next 27 years. All undersecured
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6In conjunction with her plan, Davis commenced an adversary

proceeding (1) seeking to strip down each undersecured lien to

the value of the collateral securing it, (2) seeking to strip off

each wholly unsecured lien and (3) seeking to determine the

allowed amount of each secured claim as equal to the value of the

collateral securing it.

7Bank of America, National Association as successor by

merger to LaSalle Bank NA as trustee for WaMu Mortgage

Pass-Through Certificate Series 2006-AR13 Trust (“Bank of

America”) claims to hold all right, title and interest to the

loans secured by the first trust deed on the Ranch and the first

trust deed on the Residence.

8

The Trustee also questioned Davis’s eligibility, but the

Trustee did not elaborate on this point beyond raising the

concern in her objection.

4

portions of these encumberances were to be paid nothing.6

Shortly thereafter, Davis amended her plan to provide for

interest only payments for seven years, with the full amount of

each allowed secured claim due immediately thereafter. Davis’s

amended plan also increased the interest rate to be paid on the

claims secured by the Ranch and the Residence to 5.25% and the

claim secured by the Triplex to 4.75%.

The Trustee and some of Davis’s secured creditors filed

objections to Davis’s chapter 12 plan. Bank of America, one of

the objecting secured creditors,7 argued among other things that

Davis was ineligible to be a debtor under chapter 12 because the

aggregate amount of her debt exceeded the debt limit set forth in

§ 101(18).8

In response to Bank of America’s ineligibility argument,

Davis asserted that the undersecured portion of each secured

creditor’s claim should not be counted in determining her

eligibility for chapter 12 because her personal liability had
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been discharged in her prior chapter 7 case. Based on this

argument, Davis calculated the aggregate amount of her debt for

eligibility purposes as $1,835,000 – equal to the value of the

collateral securing all of the secured creditors’ claims. 

Ultimately, the bankruptcy court agreed that Davis was

ineligible to be a chapter 12 debtor. It relied upon Quintana v.

IRS (In re Quintana) (“Quintana I”), 107 B.R. 234, 239 (9th Cir.

BAP 1989), aff'd (“Quintana II”), 915 F.2d 513 (9th Cir. 1990),

which held that the undersecured portion of an essentially

nonrecourse secured debt should be counted for purposes of

determining chapter 12 eligibility.

On November 23, 2011, the bankruptcy court entered its order

dismissing the chapter 12 bankruptcy case, stating that the

$4.1 million in debt listed in Davis’s schedules exceeded the

debt limit set forth in § 101(18) and hence Davis was ineligible

under § 109(f) to file a chapter 12 case. Davis timely filed her

notice of appeal on December 7, 2011.

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C.

§ 157(b)(2)(A) and (L), and we have jurisdiction under 28 U.S.C.

§ 158.

DISCUSSION

The sole issue presented in this appeal is whether, in light

of Davis’s prior chapter 7 discharge, chapter 12 eligibility as

set forth in § 101(18) counts only the portion of her secured

debt up to the value of the collateral. This question of the

scope of obligations included within debt limits for eligibility

purposes is a question of statutory interpretation subject to de
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9The above-cited cases arise under both chapter 12 and

chapter 13.

6

novo review. Quintana I, 107 B.R. at 236 (addressing chapter 12

eligibility); see also Ho v. Dowell (In re Ho), 274 B.R. 867, 870

(9th Cir. BAP 2002) (addressing chapter 13 eligibility).

There is a split of authority regarding whether the

“aggregate debts” referred to in § 101(18) includes the

discharged unsecured deficiency claims of secured creditors. If

it does, Davis is ineligible; if it does not, she is. Two

reported cases – one of which was reversed – have answered this

question in the affirmative. In re Scotto-DiClemente, 463 B.R.

308, 311-14 (Bankr. D.N.J. 2012); In re Cavaliere, 194 B.R. 7, 13

(Bankr. D. Conn. 1996), rev’d, Cavaliere v. Sapir, 208 B.R. 784,

785-86 (D. Conn. 1997). And three reported cases have answered

this question in the negative. In re Osborne, 323 B.R. 489, 493

(Bankr. D. Or. 2005); Cavaliere v. Sapir, 208 B.R. at 785-86; In

re Winder, 171 B.R. 728, 731 n.5 (Bankr. D. Conn. 1994) (in

dicta).9

But before we address any of these decisions, we first must

look at Quintana I and Quintana II. As prior precedent of this

Panel and the Ninth Circuit, they control the outcome of this

appeal unless they are inapposite. In these cases, prior to the

debtors’ chapter 12 bankruptcy filing, the debtors were in

default on secured debt in the original principal amount of

$1 million. The secured creditor, Connecticut General Life

Insurance Company (“CGLIC”), obtained prepetition a state court

judgment on the debt in the amount of $1,527,861.89, plus a
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10At the time of the Quintanas’ bankruptcy filing, the debt

limitation was set forth in § 101(17)(A), and was set at $1.5

million. Since that time, § 101(17) has been re-designated as

§ 101(18), and the amount of the debt limitation has been

adjusted upward from time to time, pursuant to § 104.

7

decree entitling it to conduct a foreclosure sale of the real

property collateral. But before CGLIC could conduct the

foreclosure sale, the Quintanas filed their chapter 12 petition. 

In addition to the judgment in favor of CGLIC, the Quintanas

listed debts in their bankruptcy schedules in the approximate

amount of $60,000.

Asserting a claim in the amount of $1,527,861.89, CGLIC

filed a motion to dismiss the bankruptcy case because the

aggregate amount of the Quintanas’ debt exceeded the debt

limitation for chapter 12 eligibility.10

The Quintanas disputed that the entire $1,527,861.89 should

be counted for eligibility purposes. They pointed out that, in

the process of obtaining its state court judgment, CGLIC had

agreed to waive “any right to seek a deficiency judgment . . .

if, after any foreclosure sale of the mortgaged property, the

debt was not fully satisfied.” Id. at 515. They further

asserted that, because this waiver had effectively transformed

their debt into a nonrecourse obligation, the amount of the debt

for eligibility purposes should be limited to the value of the

collateral.

In Quintana I, we rejected the Quintanas’ argument. We held

that, for eligibility purposes, CGLIC’s deficiency waiver did not

limit the amount of the debt to the value of the collateral. We

reasoned that, unless and until the collateral was sold, the full
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11We further pointed out that the accompanying legislative

history confirmed our interpretation of § 102(2):

This paragraph [Section 102(2)] is intended to cover

nonrecourse loan agreements where the creditor's only

rights are against property of the debtor, and not

against the debtor personally. Thus, such an agreement

would give rise to a claim that would be treated as a

claim against the debtor personally, for the purposes

of the Bankruptcy Code.

Id. (quoting H.R.Rep. No. 95–595 at 315; S.Rep. No. 95–989 at 28,

U.S. Code Cong. & Admin. News 1978, pp. 5814, 6272).

8

$1,527,861.89 was still a “claim” or “right to payment” held by

CGLIC, and hence still a “debt” of the Quintanas, as those terms

are defined in the Bankruptcy Code. Quintana I, 107 B.R. at 237-

39. We explained that the statutory definitions of “claim” and

“debt” were coextensive and quite broad. As set forth in

§ 101(5), a “claim” includes any “right to payment” and any

“right to an equitable remedy for breach of performance if such

breach gives rise to a right to payment.” And under § 101(12),

the term “debt” means “liability on a claim.”

We further reasoned that § 102(2) directly resolved the

issue because, for Bankruptcy Code purposes, § 102(2) specified

that a “claim against the debtor” means and includes a “claim

against property of the debtor.” Id. at 238.11 We summed up our

reasoning in Quintana I as follows:

The obligation at issue in this appeal was personally

created by the Quintanas. Even though Connecticut

General has waived its right to pursue the remedy of a

deficiency judgment, under section 102(2) the claim

against the property is a claim against the debtors.

Because the term claim is coextensive with the term

debt, this obligation is a debt of the debtors which is

defined by the amount of the claim against the

property. Connecticut General's claim against the

property is approximately $1.528 million because it has
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12Davis has not argued that there was any basis under state

law for counting only the secured debt up to the value of the

collateral. Instead, Davis entirely has relied on its claim

regarding the effect of the prior chapter 7 discharge. To the

extent Davis could have made any argument under state law, she

has waived it by not raising it either in the bankruptcy court or

on appeal. See Golden v. Chicago Title Ins. Co. (In re Choo),

273 B.R. 608, 613 (9th Cir. BAP 2002); Branam v. Crowder (In re

Branam), 226 B.R. 45, 55 (9th Cir. BAP 1998), aff'd, 205 F.3d

1350 (9th Cir. 1999).

9

the right to payment of that amount from the property

or from the proceeds of the sale of the property.

Although, as a practical matter, Connecticut General

will only be able to collect the value of the property,

it has the right to payment of the entire obligation if

under some circumstance, the property is sold for more

than its present value. Therefore, although the

collectability may be limited to the value, the right

to payment is not so limited and consequently neither

is the claim, nor the debt. Accordingly,

notwithstanding the non-recourse nature of the

obligation, the entire debt is to be considered in

computing aggregate debts.

Id. (footnote omitted).

The Ninth Circuit affirmed Quintana I in Quintana II. 

Quintana II, 915 F.2d at 518. Whereas we focused on the relevant

Bankruptcy Code provisions, the Ninth Circuit focused on the key

provisions under Idaho law establishing that, unless and until

the collateral actually was sold, CGLIC continued to hold a claim

for $1,527,861.89, and hence the Quintanas continued to owe a

debt in that amount at the time of their bankruptcy filing.12

Notwithstanding the difference in emphasis, the reasoning of

both Quintana I and Quintana II is essentially the same. 

Quintana II necessarily decided that CGLIC’s continuing right to

recover the full amount owed against the collateral or the

proceeds of the collateral meant that, for purposes of chapter 12

eligibility, the Quintanas continued to be indebted to CGLIC for
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the full amount owed. See Quintana II, 915 F.2d at 516-17.

Both Quintana I and Quintana II dovetail with the Supreme

Court’s subsequent decision in Johnson v. Home State Bank,

501 U.S. 78, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991). Johnson held

that mortgage obligations may be restructured in a chapter 13

case even when the debtor previously has obtained a chapter 7

discharge extinguishing his or her personal liability for that

debt. Id. at 80, 111 S.Ct. at 2152. Johnson reasoned that, even

though the debtor no longer was personally liable for such

mortgage obligations, the mortgagor’s surviving rights against

the collateral fell within the Bankruptcy Code’s broad

definitions of “debt” and “claim” and hence could be restructured

in a chapter 13 case. Id. at 80-85, 111 S.Ct. at 2152-55. 

Johnson emphasized that the prior chapter 7 discharge did

not wholly terminate the creditor’s claim but rather merely

extinguished “one mode of enforcing [the] claim – namely, an

action against the debtor in personam - while leaving intact

another – namely, an action against the debtor in rem.” Id. at

84, 111 S.Ct. at 2154. 

Johnson further emphasized that Congress intended to include 

obligations enforceable only against the debtor’s property within

the Bankruptcy Code’s definition of claim (and hence within the

coextensive definition of debt.) Id. at 85-87, 111 S.Ct. at

2154-55. In discerning the congressional intent, Johnson in

relevant part pointed to the text of and legislative history

accompanying § 102(2) – the very same text and legislative

history that we relied upon in Quintana I.

Particularly instructive for our purposes, Johnson opined
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that the mortgagor rights surviving after the debtor’s receipt of

his chapter 7 discharge were the functional equivalent of a

nonrecourse loan for purposes of applying § 102(2):

. . . we must infer that Congress fully expected that

an obligation enforceable only against a debtor's

property would be a “claim” under § 101(5) of the Code.

The legislative history surrounding § 102(2)

directly corroborates this inference. The Committee

Reports accompanying § 102(2) explain that this rule of

construction contemplates, inter alia, “nonrecourse

loan agreements where the creditor's only rights are

against property of the debtor, and not against the

debtor personally.” Insofar as the mortgage interest

that passes through a Chapter 7 liquidation is

enforceable only against the debtor's property, this

interest has the same properties as a nonrecourse loan.

It is true, as the Court of Appeals noted, that the

debtor and creditor in such a case did not conceive of

their credit agreement as a nonrecourse loan when they

entered it. However, insofar as Congress did not

expressly limit § 102(2) to nonrecourse loans but

rather chose general language broad enough to encompass

such obligations, we understand Congress' intent to be

that § 102(2) extend to all interests having the

relevant attributes of nonrecourse obligations

regardless of how these interests come into existence.

Id. at 86-87, 111 S.Ct. at 2155 (emphasis added and citations

omitted). 

In sum, while Quintana I, Quintana II and Johnson emphasize

different points, each holds that obligations enforceable against

the debtor’s property but for which the debtor has no personal

liability are nonetheless “claims” and “debts” within the meaning

of the Bankruptcy Code. These decisions control the outcome of

this appeal. Their reasoning simply cannot be reconciled with

Davis’s contention that the undersecured portion of the amount

owed to her secured creditors does not count as a debt for

eligibility purposes. As we explained in Quintana I, the full

amount owed continues to be a claim against the collateral, and
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13The discharge also did not extinguish the secured

creditors’ rights to assert the discharged debt as a setoff

against any prepetition claim that Davis ultimately might have

attempted to assert against the secured creditors. See

Davidovich v. Welton (In re Welton), 901 F.2d 1533, 1538-39 (10th

Cir. 1990); Camelback Hosp., Inc. v. Buckenmaier (In re

Buckenmaier), 127 B.R. 233, 236-37 (9th Cir. BAP 1991); see also

Carolco Television Inc. v. Nat’l Broad. Co. (In re De Laurentiis

Entm’t Group Inc.), 963 F.2d 1269, 1276-77 (9th Cir. 1992)

(chapter 11 discharge did not prohibit creditor from asserting

setoff in defense to claims asserted by reorganized debtor). In

that sense as well, the secured creditors’ deficiency claims

would have survived Davis’s chapter 7 discharge.

12

hence a “debt” under the Bankruptcy Code, unless and until the

collateral is sold. Furthermore, as stated in Johnson, a prior

chapter 7 discharge only extinguishes one “mode of enforcing” the

claim but does not extinguish the claim itself (or any portion

thereof).13

We acknowledge the three reported decisions holding that,

after a chapter 7 discharge, only the amount of debt owed up to

value of the collateral is counted as debt for eligibility

purposes. In re Osborne, 323 B.R. 489, Cavaliere v. Sapir,

208 B.R. 784, and In re Winder, 171 B.R. 728. But we don’t find

any of these three decisions persuasive. None of them

effectively distinguished Quintana I, Quintana II or Johnson. 

Indeed, Cavaliere and Winder – as Connecticut cases out of the

Second Circuit – don’t even mention the Ninth Circuit precedent

of Quintana I or Quintana II. 

As for Osborne, its reasoning and efforts to distinguish

both Quintana cases do not bear close analysis. In Osborne,

after receiving a chapter 7 discharge, the Osbornes filed a

chapter 12 petition. Id. at 490-91. The secured creditor, Farm
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14Section 506(a)(1) provides in relevant part:

An allowed claim of a creditor secured by a lien on

property in which the estate has an interest . . . is a

secured claim to the extent of the value of such

creditor's interest in the estate's interest in such

property, . . . and is an unsecured claim to the extent

that the value of such creditor's interest . . . is

less than the amount of such allowed claim.

15Section 502(b)(1) provides in relevant part that, if an

objection to claim is filed:

the court, after notice and a hearing, shall determine

the amount of such claim . . . , and shall allow such

claim in such amount, except to the extent that – 

(1) such claim is unenforceable against the

debtor and property of the debtor, under any

agreement or applicable law for a reason

other than because such claim is contingent

or unmatured; . . . . 

13

Credit, moved to dismiss the chapter 12 case on eligibility

grounds. According to Farm Credit, it was owed over $1.4

million, and that amount when combined with other debts the

Osbornes owed exceeded the $1.5 million family farmer eligibility

limit set forth in § 101(18) at the time. Id. at 492. But

Osborne held that, in light of the effectively nonrecourse nature

of the debt owed to Farm Credit as a result of the prior

chapter 7 discharge, the amount of debt to be counted for

eligibility purposes should be limited to the value of Farm

Credit’s collateral – $480,500. Id. at 492-93.

In reaching this holding, Osborne imported into its

eligibility analysis both § 506(a)(1)14 and § 502(b)(1).15

Osborne pointed out that, under § 506(a), Farm Credit’s secured

claim in the chapter 12 case would be limited to the value of the 
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collateral. As for any unsecured claim Farm Credit otherwise

would have been entitled to under § 506(a)(1) for the remaining,

undersecured balance it was owed, Osborne reasoned that, pursuant

to § 502(b)(1), the unsecured claim was subject to disallowance

because it was unenforceable as a result of the Osbornes’ prior

chapter 7 discharge. Id. at 493. Thus, according to Osborne,

the fact that Farm Credit’s unsecured claim was unenforceable and

subject to disallowance (as a result of the prior chapter 7

discharge) meant that it had no claim at all for eligibility

purposes.

Osborne further opined that Quintana II was distinguishable. 

According to Osborne, Quintana II’s holding hinged on the fact

that the collateral had not yet been sold, so the full amount of

the debt still was collectible against the collateral (unless and

until the sale of the collateral actually occurred), whereas the

Osbornes’ prior chapter 7 discharge already had rendered

uncollectible the undersecured portion of the debt owed to Farm

Credit. Id.

But Osborne’s reasoning and its grounds for distinguishing

Quintana II cannot be reconciled with Johnson, which stated that

nonrecourse secured debt and undersecured debt subject to a

chapter 7 discharge are functional equivalents under the

Bankruptcy Code for purposes of the meaning of the terms “claim”

and “debt.” See Johnson, 501 U.S. at 86-87, 111 S.Ct. at 2155. 

Osborne also cannot be reconciled with Johnson’s statement that

the prior chapter 7 discharge only extinguished one mode of

collecting the claim and not the claim itself. Id. at 84, 111

S.Ct. at 2154.
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16Cavaliere similarly relies on § 506(a) and § 502(b)(1) to

reach the same result as Osborne. Accordingly, we reject

Cavaliere as well. As for Winder’s dictum, it is unclear how

Winder reached its conclusion. Ironically, Winder cites to

Johnson, but Winder does not explain how Johnson supports

Winder’s dictum. As we have explained above, Johnson supports

the opposite conclusion.

17Section 109(e), which governs eligibility for chapter 13,

sets separate limits for secured debt and unsecured debt. In

contrast, § 109(f), which governs eligibility for chapter 12,

refers to the definition of “family farmer” in § 101(18) for its

aggregate debt limits.

15

In any event, Osborne simply fails to offer any legitimate

justification for using § 506(a) and § 502(b)(1) to diminish the

amount of the Osbornes’ debt for eligibility purposes.16 Osborne

claims that Scovis v. Henrichsen (In re Scovis), 249 F.3d 975

(9th Cir. 2001) supports its usage of § 506(a) and § 502(b)(1),

but Osborne’s reliance on Scovis is misplaced. Scovis held 

that the entire amount of debt owed to a wholly-undersecured

secured creditor should be counted as unsecured for purposes of

determining chapter 13 eligibility. Id. at 983-84.17 In so

holding, Scovis relied upon the “readily ascertainable” effect

§ 506(a) and § 522(f) would have on the secured creditor’s claim

in the chapter 13 bankruptcy case. Id. In short, Scovis stands

for the relatively unremarkable proposition that, when

determining a debtor’s chapter 13 eligibility, the undersecured

portion of a secured creditor’s claim should be counted as

unsecured debt.

Importantly, Scovis did not hold that undersecured

nonrecourse claims should not be counted at all for eligibility

purposes. Extending Scovis in this manner would bring it into
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18We also note that giving the chapter 7 discharge the

effect Osborne urges would be the functional equivalent of

enabling chapter 7 debtors to strip the liens of partially and

wholly undersecured creditors. But the Supreme Court has held

that, notwithstanding § 506(d), chapter 7 debtors are not

permitted under the Bankruptcy Code to engage in lien stripping. 

See Dewsnup v. Timm, 502 U.S. 410, 417, 112 S.Ct. 773, 116

L.Ed.2d 903 (1992) (holding that chapter 7 debtor is not

permitted to “strip down” an undersecured lien); see also Laskin

v. First Nat'l Bank of Keystone (In re Laskin), 222 B.R. 872, 876

(9th Cir. BAP 1998) (extending Dewsnup to hold that chapter 7

debtor not permitted to “strip off” wholly unsecured lien). 

Indeed, if Davis’s chapter 7 discharge effectively had stripped

down the secured creditors’ liens to the value of their

(continued...)

16

conflict with Quintana I, Quintana II and Johnson. Thus, we

decline to so extend Scovis.

Most importantly, there is a fundamental flaw in Osborne’s

reasoning: it conflates bifurcation of claims into secured and

unsecured portions (as addressed in § 506(a)), and the

allowability of claims after objection (as addressed in

§ 502(b)(1)) with whether there is any claim in the first

instance to be counted for eligibility purposes. Congress

clearly knew how to limit the type and nature of claims counted

for eligibility purposes. See § 109(e) (specifying that only

noncontingent and liquidated claims should be counted for

eligibility purposes). But Congress chose to narrow neither the

term “claim” nor the term “debt” in the manner Osborne suggests

they should be narrowed – to only cover allowed or allowable

claims. Put another way, the statutes Osborne invokes concern

the bifurcation and allowance of claims – issues which generally

are beyond the scope of the inquiry into the existence of claims

for eligibility purposes.18
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18(...continued)

collateral, it would have been unnecessary for her to file, as

she did, a lien-stripping complaint in her chapter 12 case.

17

We will not substitute Osborne’s judgment of how eligibility

should work in place of Congress’s apparent intent. When

Congress’s intent is clear based on the plain and unambiguous

language of the statute, our task of construing the statute is at

an end, so long as the statutory scheme appears coherent and

consistent. United States v. Ron Pair Enters., Inc., 489 U.S.

235, 240–41, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). Here, there

is no ambiguity or incoherence in the broad definition of

“claims” and “debts” used in the Bankruptcy Code. Nor did

Osborne (or Davis) identify any inconsistency in the statutory

scheme.

Consequently, we will assume that Congress has said what it

meant and meant what it has said. See Conn. Nat'l Bank v.

Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391

(1992). If Congress believes that the scope of debts counted for

eligibility purposes should be narrower, it will need to amend

the statute. See Lamie v. U.S. Trustee, 540 U.S. 526, 542, 124

S.Ct. 1023, 157 L.Ed.2d 1024 (2004).

CONCLUSION

For all of the reasons set forth above, we AFFIRM the

bankruptcy court’s order dismissing Davis’s chapter 12 case.