Opinion
Case No. 05-13008.
August 16, 2006
DECISION ON MOTION TO AVOID LIEN
This matter is before the court on debtor's motion, filed pursuant to 11 U.S.C. § 522(f)(1), to avoid a judicial lien which allegedly impairs an exemption in real estate. The lien in question is held by Capital One Bank. Notice of the motion has been given to the lienholder and there has been no objection thereto. Despite the fact that the motion is unopposed, the court cannot properly grant it because it fails to allege sufficient facts to state a cognizable claim for lien avoidance pursuant to § 522(f)(1). See, In re Wall, 127 B.R. 353, 355 (Bankr. E.D. Va. 1991). Unlike adversary proceedings which contemplate notice pleading, motions initiating contested matters are required to state the grounds for relief "with particularity." See, Fed.R.Bankr.P. Rule 9013.
In addition to the motion's deficiencies, the notice of motion and opportunity to object which the debtor served in connection with the motion is also deficient, because the notice does not adequately "state the relief sought" by the motion. N.D. Ind. L.B.R. B-2002-2(c)(3). The notice fails to sufficiently identify the property subject to the lien.
Not every judicial lien upon exempt property may be avoided. Lien avoidance pursuant to § 522(f)(1) is available only where the judicial lien impairs a claimed exemption. The concept of impairment was reduced to a mathematical formula by the amendments to § 522(f) promulgated by the Bankruptcy Reform Act of 1994. 11 U.S.C. § 522(f)(2)(A); In re Thomsen, 181 B.R. 1013, 1015 (Bankr. M.D. Ga. 1995). When the amount due on account of the liens sought to be avoided, all other liens on the property and the amount of the debtor's exemption "exceeds the value that the debtor's interest in the property would have in the absence of any liens" the debtor's exemption is impaired. 11 U.S.C. § 522(f)(2)(A)(I) thru (iii). Thus, in order for the court to determine if a judgment lien impairs an exemption to which a debtor may be entitled, in addition to identifying the property subject to the judicial lien, the motion must provide information concerning the value of the property, the amount due on account of all liens against it, and the amount of the exemption claimed by the debtor. 11 U.S.C. § 522(f)(2)(A); see also Thomsen, 181 B.R. at 1015-16.
Exemptions in bankruptcy are not automatic. They exist only as a result of the affirmative declaration of the debtor. See, 11 U.S.C. § 522(1); Fed.R.Bankr.P. Rule 4003(a). See also, Matter of Sherbahn, 170 B.R. 137, 140 (Bankr. N.D. Ind. 1994) ("the extent of [an] exemption is determined by the value claimed exempt which the debtor places in its schedule of exemptions."). The debtor makes this declaration only through Schedule C — Property Claimed as Exempt. Unless it does so, there is no exemption.
Where a debtor has not claimed an exemption in the property subject to a judicial lien, there is nothing for § 522(f) to protect. See, In re Berryhill, 254 B.R. 242, 243 (Bankr. N.D. Ind. 2000); In re Wall, 127 B.R. 353, 356 (Bankr. E.D. Va. 1991) ("[I]t does not make sense to allow a lien to be avoided on property that has not been claimed exempt."); Swaim v. Kleven, 1:04-CV-33 (D.N.D. Ind. 2004). See also, In re Mukhi, 246 B.R. 859, 862 (Bankr. N.D. Ill. 2000) (one requirement for lien avoidance under 522(f) is that debtor claim an exemption); In re Rushdi, 174 B.R. 126, 127 (Bankr. D. Idaho 1994) (debtor has burden of showing that property is listed on debtors schedules as claimed exemption). A review of the debtor's schedule of exemptions — Schedule C — reveals that the debtor has not claimed an exemption in the property. Thus, no exemption has been claimed in the real estate described in the motion and, as a result, § 522(f) may not be used to avoid any judicial liens against that property. The motion will be DENIED.