In re Perkins

Randy and Geneva Perkins (debtors) were a cattle farmer and a secretary, respectively. Diamond Feeders, LLC paid Randy to care daily for 262 cattle on Randy’s leased land, where Randy also cared for 37 of his own cattle. Cattle-related income was more than half of the Perkinses’ gross income on their 2010 and 2011 tax returns. The Perkinses filed for Chapter 12 bankruptcy in 2013. Farm Credit Mid-America, PCA (Farm Credit) (creditor) filed proofs of claim totaling $208,578.02 based on loans from Farm Credit secured by the Perkinses’ real property, farm equipment, and cattle. The Perkinses’ Chapter 12 plan proposed making $12,970.02 semiannual payments on Farm Credit’s claim—a 10-year amortization of the claim at 4.5 percent interest—followed by a roughly $124,000 balloon payment in 2018. The plan maintained Farm Credit’s liens on the Perkinses’ property during the plan but provided no additional security. The Perkinses proposed funding their plan with their cattle-related income, their Social Security benefits, and Geneva’s secretarial income. Although the Perkinses proposed making $22,454.25 semiannual payments to the Chapter 12 trustee, the Perkinses’ finances suggested possible inability to make those payments and still pay their other expenses. Farm Credit objected to the Perkinses’ plan, arguing that they were not family farmers eligible for Chapter 12. Farm Credit further asserted that the Perkinses’ plan was unconfirmable because the plan did not provide Farm Credit with its claim’s present value.