MEMORANDUM OPINION REGARDING DEBTORS' MOTION FOR ORDER AVOIDING JUDICIAL LIEN
ARTHUR J. SPECTOR, Bankruptcy Judge.
On February 16, 1989, Thomas and Diane Sanglier (Debtors) filed a voluntary petition for relief under chapter 7. In their schedules, the Debtors disclosed that they owned a home with a value of $51,000, subject to a mortgage of $36,000. The Debtors claimed a § 522(d)(1) exemption of $10,430 in the home.
This is a core proceeding within the bankruptcy jurisdiction of the federal district court. 28 U.S.C. §§ 1334; 157(b)(2)(B), (K), (O).
Lombardi did not dispute the Debtors' contention that the value of the Debtors' home on the date they filed their petition was $51,000, and we so find. Lombardi also did not question the Debtors' claim that the property was subject to a $36,000 mortgage on the date of the petition, and we therefore conclude that the equity which would otherwise be available to the Debtors for exemption is $15,000.
At the hearing, the Debtors argued that Lombardi's lien remains valid as to only $4,570. They came to this conclusion based on the following arithmetic:
Value of home = $51,000 Mortgage = (36,000) ________ Equity = $15,000 Amount by which exemption is impaired = ($10,430)
4________ Valid Lien = $ 4,570
In seeking a determination that Lombardi's lien is limited to $4,570, of course, the Debtors' objective is to preclude Lombardi from recovering any increased equity which will be built up as the Debtors pay off the mortgage and/or the value of the property increases.
Not surprisingly, Lombardi resisted the Debtors' contention that its lien was so limited. It argued that § 522 does not authorize the avoidance of any portion of a judicial lien to the extent it exceeds the amount by which the Debtors' exemption is impaired.
Lien = $33,830.18 Amount by which exemption is impaired = (10,430.00) __________ Valid Lien = $23,400.18
For the reasons which follow, we agree with Lombardi.
A good number of courts and a major treatise have so interpreted this provision. See In re Alu, 41 B.R. 955, 957-58, 11 C.B.C.2d 1458 (E.D.N.Y.1984); In re Chabot, 100 B.R. 18, 20-21, 19 B.C.D. 332 (Bankr.C.D.Cal.1989) (Russell, J.); In re Hermansen, 84 B.R. 729, 732, 18 C.B.C.2d 952 (Bankr.D.Colo.1988); In re West, 68 B.R. 647, 648-49 (Bankr.C.D.Cal.1986) (Ryan, J.); In re Carney, 47 B.R. 296, 299 (Bankr.D.Mass.1985); In re Duncan, 43 B.R. 833, 840, 12 B.C.D. 685, 11 C.B.C.2d 677 (Bankr.D.Alaska 1984); In re Fitzgerald, 29 B.R. 41, 43, 10 B.C.D. 531 (Bankr.E. D.Va.1983), vacated and remanded on other grounds, 729 F.2d 306 (4th Cir.1984); In re Cohen, 13 B.R. 350, 355-57, 7 B.C.D. 1399 (Bankr.E.D.N.Y.1981); 3 Collier on Bankruptcy, ¶ 522.29, at 522-90 (15th ed. 1990) ("When the debtor avoids the fixing of a lien [under] section 522(f) . . ., the lien is avoided only to the extent of the exemption, and the value of the lien that exceeds the amount that is exempted may still be enforced by the creditor.") This conclusion represents a logical extension of the holding by many courts to the effect that lien avoidance under § 522(f) is not available to a debtor with no equity in the property (i.e., with no interest in the property above and beyond the sum of unavoidable liens). See In re Gaylor, 123 B.R. 236, 21 B.C.D. 421 (Bankr.E.D.Mich.1991) (collecting cases.)
In support of their argument to the contrary, the Debtors cited In re Blevins, 53 B.R. 74 (Bankr.W.D.Va.1985). Blevins held that, because the debtors had no equity in their residence above and beyond their allowable exemption, the judicial lien on the property was entirely avoided under § 522. The court reasoned that to hold otherwise would allow the lienholder to benefit from "after-acquired property" (i.e., the debtors' post-position equity build-up), a result which the court apparently believed would be contrary to §§ 551 and 552 of the Code. 53 B.R. at 75. In support of its holding, the court cited Local Loan v. Hunt, 292 U.S. 234, 54 S.Ct. 695, 78 L.Ed. 1230 (1934) and 4 Collier on Bankruptcy, ¶ 552.01 (15th ed.) We do not believe, however, that the foregoing authorities or Code sections justify any such conclusion.
Section 551 provides that a transfer avoided under § 522 or certain other specified Code provisions "is preserved for the benefit of the estate"; it does not purport to define the extent to which such a transfer may be avoided. Although § 552 provides generally that pre-petition liens are ineffective against property acquired post-petition, that section applies only to consensual liens; it simply does not speak to the post-petition validity of involuntary liens.
Blevins' reliance on Hunt is also misplaced. That case involved a voluntary wage assignment and was decided under the Bankruptcy Act of 1898, which contained no provision comparable to § 522(f) of the Code. We therefore find Blevins to be unpersuasive.
Although not cited by the Debtors, there are several other cases which support their
For the reasons stated, we hold that § 522(f)(1) does not permit a debtor to void a judicial lien to the extent it exceeds the amount by which a debtor's otherwise available exemption is impaired. Lombardi's lien is therefore voided by § 522(f)(1) only in the amount of $10,430. It remains valid and enforceable to the extent it secures indebtedness in excess of that amount.