Bankr. No.:
99-10322
Adv. No.:
00-1013
Chapter:
7
Date of Decision:
December 26, 2000
Issue:
Debtors' motion to avoid the bank's lien and the bank's complaint to determine the validity, priority, and extent of its lien on Debtors' homestead were combined for resolution. The key issue presented was whether the bank had a lien on Debtors' homestead that survived Debtors' Chapter 7 bankruptcy.
Ruling:
The Court concluded that regardless of whether the Bank's lien formally attached to Debtors' homestead pre-petition (or attached to at least any equity in excess of the allowable homestead exemption of $30,000 when the judgment was entered), the lien impaired the homestead exemption, which was unlimited in amount since one debtor had turned 70 before the petition was filed.
Since the lien impaired the homestead, as the term impairment is defined by § 522(f)(2)(A), the lien was subject to removal under 11 U.S.C. § 522(f). The Bank no longer had an enforceable interest.
Full Bankruptcy Court Decision:
