Central District Consumer Bankruptcy Attorney's Association

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The court looks at Schedules D, E and F. Schedule D will state the value
of the property and the amount that is secured versus the amount that is
unsecured. BestCase will add up these numbers and state the total amount
of unsecured in the Plan under Class 5. Now Judge Tighe has stated that
as long as some portion of a lien is secured, the entire lien will be
counted as secured for 109(e) purposes. I believe, though, that there
are other decisions (different jurisdictions) which will bifurcate the
secured and unsecured portions regardless of whether or not they can be
stripped under Section 506. However, it does not appear that any of the
Judges in the Central District have signed on to that interpretation.
In your case, your PC is not eligible because you must add the $325K to
the $196K.
Nancy Clark
Borowitz & Clark, LLP
100 N. Barranca Avenue, Suite 250
West Covina, CA 91791
Office: (626) 332-8600
Fax: (626) 332-8644
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Hello Everyone:
I use BestCase software to prepare ch 13 petitions and when it comes to creating the plan, there is an "error" button which indicates a potential 109(e) issue. In your experience, how do Judges in Woodland Hills and in LA interpret this section. Judge E. Carroll always states that the 109(e) issue is determined at the time of the filing. Here is the situation with a PC. PC has three loans against her principal residence totaling $606K. The first loan is $410K and the appraisal came in at $405K. Therefore, there is an "undersecured portion" of $196K. PC also has $325K in unsecured debt ("F" debt). Summary of Schedules states $606K for secured claims and $325K for unsecured nonpriority claims. The error message that I get states "unsecured debt is over by $184,100. I know that the limit for unsecured nonpriority debts is $336,900 and based on my research, the undersecured portion of the loans are counted toward this limit, but sometimes I see a different interpretation. I guess my question is "do the judges look at summary of schedules to determine if there is a 109(e) issue or is there some other formula"? Any advice is greatly appreciated!
Thanks
Sofya

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