MEMORANDUM AND ORDER AVOIDING JUDICIAL LIENS
11 U.S.C. § 522(f)(1)
ALAN H.W. SHIFF, Bankruptcy Judge.
In each of the above adversary proceedings, the plaintiff-debtor seeks to avoid judicial liens upon certain real property, identified in his complaint,
At trial, the plaintiff offered evidence that the fair market value of the subject premises was $69,500. It was further demonstrated that the current balance of the mortgages on the property is $87,300.00. The question before the court is whether Code section 522(f)(1) applies when there is no equity in the property to which the judicial liens attach.
The plaintiff claims that he has made arrangements with the three mortgagees for the continued payment of those debts and argues that when he reduces those debts to the level that he has equity in the property, he should be able to apply his exemption to that property interest and thus avail himself of the fresh start intended by Congress. The plaintiff's claim is
A traditional approach to statutory construction is to analyze the language of a statute in the context of legislative intent on the assumption that the legislative branch chose particular words to accomplish a specific purpose. As stated by Judge Kaufman in Rockefeller v. Commissioner of Internal Revenue, 676 F.2d 35, 36 (2d Cir. 1982):
Here the language of Code section 522(f) states that debtors may "avoid the fixing of a lien on an interest of the debtor in property..." (emphasis added). It must be assumed that Congress intended to use the word "interest" in section 522(f). The word "interest" is not the substantive equivalent of the word "equity". Those words are not used interchangeably in the Code.
Clearly Congress could have restricted lien avoidance under section 522(f) to any unincumbered portion of the debtor's property. Instead it is apparent that Congress chose to allow debtors broader avoiding power. This analysis is consistent with the legislative history of section 522.
S.Rep. No. 989, 95th Cong., 2d Sess. 76, reprinted in 1978 U.S.Code Cong. & Ad. News 5787, 5862; see also Pine v. Credithrift of America, Inc., 18 B.R. 711, 712 (D.C.E.D.Tenn.1982) ("Section 522 was enacted to provide sufficient exemptions to allow the debtor to maintain his dignity and support his family while starting down the road to financial recovery.")
Having established that the debtor's interest in property is not extinguished by his lack of equity therein, it follows that the debtor may claim an exemption in property as to which he has no equity since Code section 522(d)(1), which he employs in this case, refers to "the debtor's aggregate interest, not to exceed $7,500 in value, in real property..." See In re Van Gorkom, supra, 4 B.R. at 690, 6 B.C.D. at 542.
The question then is whether an exemption of an interest is impaired by a judicial lien when other unavoidable liens exceed the fair market value of the property. If so, that lien may be avoided by the debtor under section 522(f)(1).
Accordingly, the judicial liens identified in each of these adversary proceedings are avoided in their entirety and judgment may enter to that effect.
(f) Notwithstanding any waiver of exemptions, 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 under subsection (b) of this section, if such lien is —
(1) a judicial lien ...
(b) Notwithstanding section 541 of this title, an individual debtor may exempt from property of the estate either —