2000 #20 LUELLA V. WEST 6-8-2000

IN RE JESSE B. AND LUELLA V. WEST, Chapter 7; Bankr. No. 99-10322

Through Debtors' motion to discharge judgments under S.D.C.L. § 15-16-20 and Langford State Bank's objection, the parties had anticipated that the Court would need to address whether a Chapter 7 petition constitutes a voluntary sale of a homestead, even for a debtor who is age 70 or over. The issue presented in this case is, however, much narrower.

Debtors' motion under § 15-16-20 raises only the question of whether two particular judgments should be discharged. As noted in the form order in our District's Local Bankruptcy Rules, an order under § 15-16-20 does not address any valid pre-petition lien. An order under § 15-16-20 simply declares that a debtor who has received a discharge of a debt in bankruptcy is also discharged from his personal liability under any judgment related to that particular debt. That is in accord with 11 U.S.C. § 524 (a)(1), which provides that a discharge voids a judgment to the extent that the judgment is a determination of the debtor's personal liability. Further, although the Bank did not timely object to Debtors' homestead valued at $90,000 and this property was removed from the bankruptcy estate, that does not mean that any pre-petition judgment lien that the Bank may have had did not go with the property.

Accordingly, Debtors' motion to discharge judgments must be granted. The order will only discharge the Bank's (and the other listed creditor's) judgment as to Debtors' personal liability. Whether the Bank retains an in rem action against Debtors' home arising from a valid, pre-petition judgment lien will have to be answered another day in another forum.

Attorney Ewinger shall prepare an appropriate order.