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Timestamp: 2016-12-05 02:31:11
Document Index: 17415038

Matched Legal Cases: ['§522', '§ 522', '§ 523', '§ 522', '§ 522', '§ 522', '§ 523', '§ 522', '§ 523', '§ 523', '§ 522', '§ 522', '§ 522', '§ 523', '§ 523', '§ 522', '§ 523', '§ 522', '§ 522', '§ 522', '§ 522', '§ 523', '§ 522', '§ 523', '§ 523']

Brief in Support of Avoidance of Liens | In re Baxter | Marc S. Stern - JDSupra
In re BaxterBrief in Support of Avoidance of Liens
Motion in support of avoidance of lien as impairing homestead on non-dischargeable debt.
Download PDF 123456789 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MARC S. STERN ATTORNEY AT LAW 1825 NW65TH STREET SEATTLE, WA98117 (206)448-7996 MEMORANDUM IN SUPPORT OF MOTION TO AVOID LIENS – 1 in support of lien avoidance.Marc S. Stern Hon. Thomas T. Glover 1825 NW 65th Street Chapter 7 Seattle, WA 98117 (206) 448-7996 marc@hutzbah.com UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE In re: , Debtor. _______________________________ )))))) NO. 07!13402 MEMORANDUM IN SUPPORT OF MOTION TO AVOID LIENS WHICH IMPAIR HOMESTEAD The judgment liens held by Impart, Inc., Alan David Lien and Patricia S. Lien and Boeing Employees Credit Union impair the debtor’s homestead and should be removed. ISSUE PRESENTED 1. May the debtor avoid the lien of a Judgment Lien Creditor that impairs the homestead even if the debt is ultimately found to be non-dischargeable? ARGUMENT Lien avoidance is found in §522 of the code. It provides that the debtor can avoid a lien if in encumbers his homestead exemption. There is no mention made anywhere in the section of the dischargeability or nondischargeability of the debt. In In re F. James Ash 166 B.R. 202, 30 Collier Bankr.Cas.2d 1961, Bankr. L. Rep. P 75,858 (Bky Conn 1994) the court held: A substantial number of courts considering this issue agree that a debtor's avoidance power is not conditioned upon whether the underlying debt is dischargeable unless the debt comes within the categories of nondischargeable debts Congress expressly excepted from the operation of § 522(c), none of which are relevant to the present matter. [FN5] See Walters v. United States Nat'l Bank of Johnstown, 879 F.2d 95, 97 (3d Cir.1989) (holding that a judicial lien impairing an exempted homestead interest which is securing a debt found to be nondischargeable under § 523(a)(2)(A) (fraud) may still be avoided under § 522(f)) ("Congress was well aware of the relationship between [§§ 522 and 523], and carefully excepted from the exemption section some, but not all, non-dischargeable debts."); In re Liming, 797 F.2d 895, 898 (10th Cir.1986) (nonpossessory, nonpurchase-money security interest avoided pursuant to § 522(f)(2) notwithstanding that underlying debt was found to be nondischargeable under § 523(a)(2)(B) (false financial statement)) ("[A] debtor may bring an action to avoid a lien under [§ 522(f) ] even if the debt secured by that lien is declared nondischargeable."); In re Evaul, 152 B.R. 31, 32 (Bankr.W.D.N.Y.1993) (judicial lien securing nondischargeable 1 Marc S. Stern Hon. Thomas T. Glover 65t" 2 3 4 WASHINGTON 5 In re: 07-13402 6 IN SUPPORT 7 89 and impair the debtor's homestead and should be if to be non-dischargeable? provides that encumbers made F James Ash P Conn 1994) the courts considering this issue agree power is not conditioned a on debt within are present matter. [FN5] See Walters v. United States Nat'l Bank of 97 (3d Cir.judicial an exempted under § 523(a)(2)(A) Congress of 1 dischargeable re Liming, 797 F.2d non purchase-money security interest debt under § 523(a)(2)(B) ("[debtor 1) N.Y. lien securing nondischargeable MARC S. STERN ATTORNEY LAW IN SUPPORT NW 651H -1 WA 98117 Reply (Pleadings) in support oflien avoidance.wpd Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=da12e1ec-9d04-4cc4-aebf-ff36b41684ad123456789 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MARC S. STERN ATTORNEY AT LAW 1825 NW65TH STREET SEATTLE, WA98117 (206)448-7996 MEMORANDUM IN SUPPORT OF MOTION TO AVOID LIENS – 2 in support of lien avoidance.student loan avoided because it impaired the debtor's homestead exemption) ("[B]ecause [§ 522(c) ] specifically enumerates certain non-dischargeable pre-petition debts for which exempt property is liable, Congress intended that [§ 522(f) ] could be used to avoid judicial liens on exempt property secured by non-dischargeable debts not specifically protected by [§ 522(c) ]."); In re Henderson, 155 B.R. 157, 159 (Bankr.W.D.Tex.1992) ("In a situation in which the lien to be avoided is secured by a non-dischargeable debt, Congress has determined that the prevailing concern is the federal interest in seeing the debtor through bankruptcy with the sufficient means necessary to maintain a basic standard of living. Thus, the avoidance of a judicial lien which may impair a debtor's right to exemptions is unaffected by the nature of the debt which is secured by the lien."); In re D'Amelio, 142 B.R. 8, 9 (Bankr.D.Mass.1992) (rejecting creditors' contention that a judicial lien securing nondischargeable debt may not be avoided); In re Gartrell, 119 B.R. 405, 406 (Bankr.W.D.N.Y.1990) (judicial lien securing debt claimed to be nondischargeable under § 523(a)(7) may be avoided by the debtor); In re Hampton, 104 B.R. 527, 528 (Bankr.M.D.Ga.1989) (judgment lien based on a debt found to be nondischargeable under § 523(a)(6) (willful and malicious injury) avoidable to the extent that it impaired the debtor's homestead exemption); Miller v. Hulvey (In re Hulvey), 102 B.R. 703, 705 (Bankr.C.D.Ill.1988) ("[T]he provisions permitting lien avoidance [do not] restrict the debtor's right to debts which are dischargeable."); In re Pipes, 78 B.R. 981, 983 (Bankr.W.D.Mo.1987) ("[T]he ability to avoid a lien ... is not dependent upon dischargeability."); In re Ewiak, 75 B.R. 211, 212 (Bankr.W.D.Pa.1987) ("[A] judicial lien based upon a nondischargeable claim is ... avoidable, otherwise the protection envisioned by § 522(c) would fail."). FN5. Section 522(c) provides that "property exempted under this section is not liable during or after the case for any debt of the debtor that arose ... before the commencement of the case," except that exempted property remains liable to the kinds of nondischargeable debts specified by Code § 523(a)(1) (taxes and customs duties) and 523(a)(5) (alimony and child support), and for debts related to financial-institution fraud. 11 U.S.C. § 522(c) . The court concurs with the reasoning of the above-cited cases and holds that the judicial lien may be avoided in its entirety as impairing the debtor's exemption under § 522(d)(1), notwithstanding that any debt *205 resulting from this unliquidated claim may prove to be nondischargeable. [emphasis supplied] A similar conclusion was reached by Judge Klobucher of the Eastern District of Washington in In Re Slater, 188 B.R. 852 (Bankr.E.D.Wash., Aug 18, 1995). More recently, in In re Yogesh B. Desai 2005 WL 1719318 (Bankr.M.D.Fla.) the court addressed this same issue. It held: The dischargeability provisions of the Bankruptcy Code do not govern the question of whether a judgment is avoidable under the Bankruptcy Code, unless the debt comes within the debts 1 B ][§ 522(c) specifically enumerates 2 pre-petition for [3 liens on exempt b non-dischargeable not specifically by [§ 522(c)]."); In re Henderson, 4 159 (Bankr.W.be is secured 5 determined that the prevailing the debtor through bankruptcy with the suffcient 6 necessary to maintain a basic standard of living. of judicial 7 In re D'Amelio, 142 B.R. 8, 9 (Bankr.D.Mass.8 debt may not be avoided); In re Gartrell, 9 lien securing debtor); In re Hampton, 104 B.R. 527, 5(B2a8nkr.Ga.jud ment lien based on a under § 523(a)(6) (willful the debtor's exemption) ; Mller v. Hulvey (In re Hulvey), 102 B.R. 703, Il1.1988) he avoidance discharg?e?able."); In rePi es, 14 1987) (" [to dependent upon dischar eability."); In re Ewiak, 75 B.R. 211, 212 15 (Bankr.W.D.Pa.1987) ('LA] judicial lien based upon a claim 16 envisioned by § 522(c) would fail."). 17 afer the of nondischargeable taxes fraud. 11 U.S.c). and holds that lien may be d)(1), notwithstanding unliquidated claim may prove to be nondischargeable. [emphasis conclusion was Klobucher District B.(Bankr.E.D.Aug 18, 1995). 27 2005 WL 1719318 (Bankr.M.D.Fla.) the court addressed this same issue. MARC S. STERN ATTORNEY LAW IN SUPPORT NW 651H -WA 98117 Reply (Pleadings) in support oflien avoidance.wpd Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=da12e1ec-9d04-4cc4-aebf-ff36b41684ad123456789 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MARC S. STERN ATTORNEY AT LAW 1825 NW65TH STREET SEATTLE, WA98117 (206)448-7996 MEMORANDUM IN SUPPORT OF MOTION TO AVOID LIENS – 3 in support of lien avoidance.Congress specifically excepted from Section 522(c), none of which apply to this case. See In re Ash, 166 B.R. 202 (Bankr.D.Conn. 1994) citing Walters v. United States Nat'l Bank of Johnstown, 879 F.2d 95, 97 (3d Cir.1989) ; In re Liming, 797 F.2d 895, 898 (10th Cir.1986); In re Evaul, 152 B.R. 31, 32 (Bankr.W.D.N.Y.1993) ; In re Gartrell, 119 B.R. 405, 406 (Bankr.W.D.N.Y.1990) (judicial lien securing allegedly nondischargeable debt under § 523(a)(7) may be avoided); In re Hampton, 104 B.R. 527, 528 (Bankr.M.D.Ga.1989) ; In re Hulvey, 102 B.R. 703, 705 (Bankr.C.D.Ill.1988) ; In re Pipes, 78 B.R. 981, 983 (Bankr.W.D.Mo.1987) . There is no basis to deny lien avoidance based upon the dischargeability or nondischargeability of the judgment. Dated this 8th day of May, 2008. /s/Marc S. Stern Marc S. Stern WSBA 8194 Attorney for Debtor 1 specifically from of In 2 o f 97 (3d Cir.1989); 3 1993 ; 119 B.R. 405, 4 1990) lien securing § 523(avoided); 5 Ga.1989); I11.1988); 6 1987). 7 upon the dischargeability non-8 dischargeability 8th 9 Dated this 10 /s/Marc S. Stern Stern MARC S. STERN ATTORNEY LAW IN SUPPORT NW 651H -3 WA 98117 Reply (Pleadings) in support oflien avoidance.wpd Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=da12e1ec-9d04-4cc4-aebf-ff36b41684ad