After a judgment is obtained, the next step is to enforce the judgment against the debtor’s assets. The creditor who has obtained a judgment against debtor will have to apply for an involuntary lien against the assets of the debtor. When the notice of involuntary lien is issued, that has to be recorded with the recorder’s office. The act of recording creates a judicial or involuntary lien against the debtor’s assets located in the county where the lien is recorded. Can debtor who files for bankruptcy relief avoid or cancel a judicial lien that has attached to his residence? The answer is YES. However, the lien must impair an exemption for it to be avoidable. To illustrate, debtor owns his residence with a fair market value of $100,000. He owes a mortgage of $50,000. Last month, the hospital that provided him chemotherapy treatment for his cancer obtained a judgment and a judicial lien on his residence for $200,000. Can debtor avoid or cancel the judicial lien for $200,000? The answer is YES.

The authority for judicial lien avoidance is Section 522 (f) of the bankruptcy code. It states that, “Notwithstanding any waiver of exemptions but subject to paragraph (3), 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…” So, clearly, debtor can avoid a judicial lien if it impairs an exemption that he is entitled to. The question is: Is debtor required by law to claim property as exempt in order to avoid judicial liens pursuant to 522 (f)? In the example above, if debtor did not claim his homestead as exempt in his bankruptcy petition, can he still avoid the judicial lien of $200,000 filed by hospital? Or, must debtor claim his homestead as exempt property so that he can avoid the lien?

LIEN AVOIDANCE DOES NOT REQUIRE EXEMPTION CLAIM(Part II)