Opinion ID: 3048675
Heading Depth: 2
Heading Rank: 2

Heading: Lien Avoidance

Text: Section 522(f)(1)(A) provides, “. . . the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled . . ., if such lien is—(A) a judicial lien.” Under § 522(f)(2)(A), a lien is considered to impair an exemption to the extent that “the sum of—(i) the lien; (ii) all other liens on the property; and (iii) the amount of the exemption that the debtor could claim if there were no liens on the property; exceeds the value that the debtor’s interest in the property would have in the absence of any liens.” The debtors have elected the Missouri state exemptions. Missouri law provides a $15,000 homestead exemption to be shared by spouses. Mo. Rev. Stat. § 513.475 (2008). Glenstone’s only argument on appeal is that the bankruptcy court erred “in finding that the judgment lien created by the imposition of a judgment as to a non-dischargeable debt would not become a lien on the debtors’ residence as a new post-petition lien and in avoiding the existing judgment lien of Glenstone Lodge beyond $15,000.” Glenstone’s argument regarding “a new post-petition lien” is simply incorrect. There is no “new post-petition lien.” There is one prepetition lien, which is either avoidable or it is not. Glenstone’s argument mischaracterizes the court’s findings on lien avoidance, which were limited to the following: Although the parties disputed what effect, if any, a finding of nondischargeability would have on the lien avoidance issue, Glenstone Lodge has agreed that, due to the value of the Treadwells’ home and the amount of the secured debt, its judgment lien would be avoidable if the debt were found to be dischargeable. Consequently, since I have found that the debt is dischargeable, Glenstone Lodge’s judicial lien on the Treadwells’ home will be avoided pursuant to § 522(f)(1). Treadwell, 411 B.R. at 650. The dischargeability of a loan is irrelevant to the avoidance of a lien under § 522(f)(1) and § 522(f)(2)(A). In order to determine whether a lien is avoidable pursuant to § 522(f)(1), a bankruptcy court must apply the statutory formula provided in § 522(f)(2)(A). “Section 522(f)(2)(A) is a 15 congressionally mandated bright line formula for determining how to calculate the extent to which a judicial lien impairs an exemption.” Kolich v. Antioch Laurel Veterinary Hosp., Inc. (In re Kolich), 273 B.R. 199, 206 (B.A.P. 8th Cir.2002), aff’d 328 F.3d 406 (8th Cir. 2003). The dischargeability of the underlying debt is therefore not a basis for avoiding or not avoiding the lien under § 522(f)(2)(A). We affirm the bankruptcy court’s avoidance of Glenstone’s lien.