2025 WL 1783558, 2025 Bankr. LEXISTITLE:  The Serial Filing Sword: BAP Bars Bad Faith After Six Strikes

The following is a case update written by Hale Andrew Antico, Chief Counsel of Antico Law Firm, analyzing In re Barrett, 2025 WL 1783558, 2025 Bankr LEXIS 1534 (BAP 9th Cir. Jun 27, 2025), a recent case of interest:

Summary

The Ninth Circuit BAP affirmed the bankruptcy court’s dismissal of the serial debtor’s sixth case under §§ 105 and 1307 for bad faith, highlighting a pattern of manipulative filings, spousal coordination, forum shopping, and egregious behavior. The appellate court further ruled that deemed-allowed claims do not confer property rights.

To view the full decision, click here.

Facts

“It is farcical for James to argue that he was not trying to defeat state court litigation with his sixth bankruptcy filing….” In re Barrett, (BAP 9th Cir. Jun 27, 2025) at *17.

Foreclosure and Legal Maneuvering

Between 2013 and 2024, the Barretts filed ten Chapter 13 petitions (most after 2021) regarding their Thermal, California home, which was secured by mortgagee Salton Sea Estates III, LLC (“Salton”). Their filings coincided with state court deadlines, enabling them to benefit from the automatic stay to delay enforcement actions. A 2018 foreclosure resulted in a 2021 unlawful detainer (“UD”) suit. Both James and, when he was barred, Torri filed bankruptcy petitions, all of which were dismissed.

In 2023, the Barretts were evicted and then broke into and squatted in the property. Torri then filed a Forcible Detainer Action (“FDA”) to retain possession and sought to sell the property in her third bankruptcy case based on a theory of ownership rights obtained from the claim she filed for Salton in her first case. The court rejected her motion, noting evidence of Salton as the rightful owner. Salton then initiated a second unlawful detainer action and contested the FDA. When her third, then fourth case was dismissed, Torri was again barred from refiling, this time for one year.

The Final Gambit

With Torri again barred from refiling and a crucial trial date approaching, in October 2024, James launched his final gambit: he filed his sixth Chapter 13 in Oklahoma, where he had no ties, to remove the pending UD action. The court transferred it back to California over his objection.

The bankruptcy court issued an OSC seeking dismissal for bad faith regarding James’s sixth filing. James asserted that the claim in Torri’s case and the FDA default judgment were conclusive proof of the Barretts’ right to ownership and possession. With the Chapter 13 trustee supporting the motion, the bankruptcy court dismissed James’s sixth bankruptcy for bad faith and imposed on him a two-year bar. James appealed the dismissal to the BAP, which affirmed.

Reasoning

Applying the Leavitt Factors and Bad Faith Analysis

A court may dismiss a case sua sponte under 11 USC § 105(a), or for cause, including bad faith, under § 1307(c). Section 1307(c) allows dismissal for bad faith, which the bankruptcy court assesses by weighing the factors from Leavitt v. Soto (In re Leavitt), 171 F.3d 1219, 1226 (9th Cir. 1999). The panel scrutinized the lower court’s application of the Leavitt factors under an abuse of discretion standard.

The BAP applied the four-factor Leavitt test to James’s sixth filing, finding that all were compellingly supported by the evidence.

• Manipulation of Stay: The BAP found that James “demonstrated an unfair manipulation of the Bankruptcy Code through his continuous case filings in a clear effort to stall his eviction from the residence.” *10.
• History of Filings: The Barretts’ nearly dozen filings over a decade, including six within three years, showed a pattern of serial bankruptcy use without discharge, which the court deemed significant evidence of bad faith. By his own admission, James acknowledged being a “serial filer.” *10.
• Intent to Defeat State Court Litigation: The court found that James’s filings were “clear attempts to hinder Salton’s ability to secure its legal rights to the residence.” *11.
• Egregious Behavior: The BAP cited the Barretts’ “tag-team” system of filing, violation of judicial orders, and jurisdictional evasion as evidence of egregious behavior. Id. at **11, 16.

Each of the Leavitt factors are “simply factors to consider,” and “what matters is the totality of the circumstances.” Khan v. Barton (In re Khan), 523 B.R. 175 (9th Cir. BAP 2014), aff’d but criticized on other grounds, 846 F.3d 1058, 1066 (9th Cir. 2017), and abrogated in part by Liquidating Tr. Comm. v. Freeman (In re Del Biaggio), 834 F.3d 1003 (9th Cir. 2016). The Ninth Circuit in Khan warned that bad faith can persist even where a plan is confirmable. *16.  Filing a bankruptcy case to defeat or delay state court litigation, even if that is not the only purpose for the filing, constitutes bad faith.” Eisen v. Curry (In re Eisen), 14 F.3d 469, 470 (9th Cir. 1994). Though Eisen involved only two filings, the Ninth Circuit found bad faith there. Eisen at 470-471. Here, the Barretts’ repeated tactics with ten filings reinforced their manipulative intent. 

The BAP highlighted the egregious nature of the Barretts’ “tag-team’ filing strategy, where both spouses alternately invoked the automatic stay to circumvent state court processes. Barrett at *16. Thus, the Panel found no abuse of discretion by the bankruptcy court. 

Deemed-Allowed Claims and Ownership Rights

The panel addressed James’s main appeal argument: whether ownership was definitively determined via the claims process in Torri’s first case. There, she filed a claim for Salton after the claims deadline passed to which it did not object. Later, she moved to sell the property, arguing that because her proof of claim was deemed-allowed, the dismissal of her first case conclusively established ownership under § 502(a). James contended that the claim established their right to ownership and possession of the residence under Siegel v. Federal Home Loan Mortgage Corp., 143 F.3d 525 (9th Cir. 1998). In Siegel, the Ninth Circuit held that a deemed-allowed claim under § 502(a) is a final judgment entitled to res judicata or claim preclusive effect in future proceedings.

The BAP distinguished Siegel (a no-asset Chapter 7) because Chapter 13 cases inherently involve assets. Also, the BAP cited another Panel ruling which similarly involved a Chapter 13 case with no plan confirmation or discharge and denied claim preclusion. In re Ramirez Ramirez, 2020 WL 4436263  (BAP 9th Cir, Aug. 3, 2020). Lastly, the Panel stated that the claims process itself does not determine ownership, and that it addresses merely a right to payment. *14, citing § 101(5). Fed. R. Bankr. Proc. Rule 7001(b) demands an adversary proceeding for ownership disputes, and no such adversary proceeding was filed here. Thus, this was distinguished from Siegel; there was no confirmation nor discharge, and an AP was never filed. James’s claim argument failed.

Author’s Commentary

This isn’t a case about debt, but the theft of time. The Barretts didn’t steal property; they stole the court’s calendar, turning the system into a bad-faith theater of delay. The case involved ten bankruptcy filings over a decade, two evictions, forced re-entry, and a strategic sixth filing across state lines. This ruling reinforces that Chapter 13 exists for genuine debt restructuring, not misusing bankruptcy procedures as manipulative tactics.

First, the deemed-allowed delusion defined their ill-fated claim strategy. Filing someone else’s claim in bankruptcy, having it allowed by default, and then weaponizing the system to block litigation or claim control over property was crafty. However, claim allowance does not equate to title. It’s akin to mistaking a parking ticket for proof of ownership… a confusion between procedural involvement and substantive rights. Likewise, possessing a tollbooth voucher doesn’t grant land registry rights; it merely confirms passage through a system. The panel saw through this fiction. Creditors should challenge removal when obstruction tactics are apparent and remain vigilant regarding proofs of claim.

Second, addressing the tag-team effort, the BAP dismantled the Barretts’ strategy, exposing it as far more than mere coordination. It was a meticulously planned bankruptcy ballet, a sequence of legal maneuvers designed to obstruct justice. They didn’t just file cases; they ran a production line of legal red herrings, each petition timed like a curtain drop to delay eviction, and every dismissal merely an intermission. When James was dismissed or barred, Torri immediately emerged as understudy, in a relay race towards obstruction. This synchronicity became evidence of bad faith under the Leavitt factors, justifying a bar on refiling for these ping-ponging petitioners. Trustees and creditors must monitor for repeated or coordinated filings by spouses. Judges should scrutinize serial filings, particularly those timed with state court events. Bars on refiling could be linked to the resolution of underlying state disputes.

Third, James’s final maneuver was an Oklahoma Gambit: far from any connection, purely to evade judicial authority through jurisdictional gamesmanship. Filing in Oklahoma (over 1,000 miles away in an adjacent circuit) and objecting to transfer was a jurisdictional Hail Mary pass that landed with a thud. This went beyond forum shopping; it was calculated system exploitation, a last-minute pivot, like an actor trying to escape the set by pretending they’re already on the other side. It was a calculated forum-jump so audacious it defied both geography and judicial patience. Jurisdiction sets boundaries, not terrains to be maneuvered around. When a party files across circuits merely to dodge a bar order, they don’t challenge venue; they erase the court’s authority.

This ruling refines Siegel’s reach (and extends Ramirez Ramirez) by clarifying that in Chapter 13 cases without confirmation or discharge, deemed-allowed claims carry no preclusive effect on ownership. It reaffirms Khan’s enduring truth: bad faith remains fatal, even when the plan is confirmable. And Barrett? It hands bankruptcy judges a playbook for identifying manipulative patterns, one that turns the Leavitt factors from checklist into compass.

Cases like Barrett don’t just strain the system’s resources; they erode its moral authority. When bad actors exploit bankruptcy as a tool of obstruction rather than relief, the public’s faith in the legal process fractures. In Barrett, the court didn’t just dismiss a case: it rewound the clock on the Barretts’ gamesmanship, restoring the bankruptcy system’s temporal integrity. The ruling stands as a reminder that while the stay may be a shield, it is never a sword… and time, once stolen, must be reclaimed.

These materials were written by Hale Andrew Antico, Chief Counsel of Antico Law Firm, representing consumer debtors in the Central District of California, and President of the Central District Consumer Bankruptcy Attorneys Association, with editorial contributions by Ed Hays with Marshack Hays Wood LLP in Irvine, California, and the Hon. Meredith Jury (ret.).