Experience Visit http://www.bklaw.com for more information on bankruptcy in general and Mark J. Markus in particular. Many questions are answered on the web page (hint, hint). The Markus webpage also contains more information on
Education/Credentials J.D., University of Arizona 1990. B.A. Economics, California State University, Northridge 1986. For more details please click here
Question I am a new atty and have a ch 7 case where the first mortgage equals or exceeds the value of the real property. There is also a judgement lien that holds second lien position. If there was equity, I believe that I could avoid the Judgement lien, but does it impair the exemption? Do you think that I can still avoid the lien, my client wants to keep the house and pay the mortgage. Thanks.
Answer The answer differs depending on the circuit your case is filed in and the exemptions laws which apply in your case. I have successfully argued that there does not need to be equity in order for the exemption to be impaired. One thing I believe is required is that you have to actually TAKE the exemption in Schedule "C" even if there is no equity.
There is a line of cases on this, at least in the 9th circuit. Just research 522(f) and "no equity". See for example, In re Higgins, 201 B.R. 965 (9th Cir. BAP 1996).
