CHAPTER 13 | § 506(A) CRAMDOWN | FEDERAL AGENCY CREDITOR | 2025–2026
Represented an individual debtor in a Chapter 13 case filed August 5, 2025 to enjoin collection activity by the United States Small Business Administration. The debtor’s schedules reflected $425,769 in secured debt, including a $145,000 SBA claim recorded against the debtor’s personal property collateral via a UCC-1 lien security agreement. Because § 506(a) bifurcates a secured claim into a secured portion (equal to the value of the collateral actually subject to the lien) and an unsecured portion (the deficiency), the SBA’s recovery depended entirely on how much of the debtor’s personal property was in fact encumbered by the UCC-1.
Through contested law-and-motion practice, the firm established that $426,167.51 of the debtor’s personal property was not subject to the SBA’s lien, reducing the SBA’s secured claim from $145,000 to $7,193.01 — a cramdown of nearly 95% of the secured position — with the remaining deficiency treated as general unsecured. The debtor then obtained confirmation of a Chapter 13 plan on February 5, 2026 providing a fixed-dollar “pot” dividend of $4,677.77 to the class of allowed general unsecured claims.
Result: SBA secured claim crammed down from $145,000 to $7,193.01 under § 506(a); $426,167.51 of personal property established to be unencumbered; Chapter 13 plan confirmed (Feb. 5, 2026) with fixed-pot dividend to unsecured creditors
U.S. Bankruptcy Court, Northern District of California — San Francisco Division
