Botkin v. DuPont Community Credit Union

Summarized by Frank Volk , U.S. Bankruptcy Court, Southern District of West Virginia
14 years 8 months ago

Citation:

No. 10-1681 (4th Cir. Jun. 13, 2011)

Tag(s):

4th Circuit

Ruling:

"[T]he Code plainly provides that debtors need not claim an exemption as a precondition of avoiding a lien that the debtor contends impairs that exemption." Slip. op. at 8.

Procedural context:

Appeal from an order of the district court that the Code does not require a debtor to have previously claimed on Schedule C an exemption in property subject to a judicial lien sought to later be avoided under § 522(f).

Facts:

After having not listed certain property as exempt on Schedule C, the Chapter 7 debtor moved to avoid a creditor’s judicial lien on the property pursuant to 11 U.S.C. § 522(f). The bankruptcy court denied the motion based upon the debtor’s failure to claim the exemption. The debtor appealed. The district court reversed, concluding that a debtor seeking to avoid a judicial lien need not have previously claimed an exemption in property subject to the judicial lien. Following a basic review of the law governing exemptions, the court of appeals noted, among other things, that “the Code’s plain language does not even appear to allow a debtor to claim an exemption at a time when the existence of a lien is preventing the property from being exempt.” Slip op. at 8. Based upon this, and other considerations, the court of appeals affirmed, holding that “the Code plainly provides that debtors need not claim an exemption as a precondition of avoiding a lien that the debtor contends impairs that exemption.” Id.

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