In addition, the security interests of the Bank are liens which impair the debtors' exemptions. The trade of the debtors is in fact farming. It has been stipulated that the subject items of property are considered farm implements and are used by the debtors as such in their farming operation. In fact, it has been specifically held that farm debtors may avoid liens on farm implements of substantial value. There is no need to reiterate the reasoning set forth in that decision.
Farm implements are indeed implements of the trade of farmers.
The Court feels compelled to briefly address the over-used economic argument with regard to lien avoidance on farm implements. It has been argued that courts should decline to allow lien avoidance on farm implements because it leads to a windfall for farm debtors filing bankruptcy. It further places the onus of additional economic burden on farmers who have not filed bankruptcy in the form of higher interest rates and difficulties in obtaining financing. A countervailing argument is to the effect that the economic impact of leaving farm debtors without sufficient assets to generate a livelihood would be reflected in higher taxes and various negative social consequences. In addition, lending institutions increasingly rely on cash flow as a basis for agricultural lending decisions due to the fact that asset value is only tenuously related to a debtor's ability to service a loan.