Maximino Santos v. Kathy A. Dockery

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,…