Barclay v. Boskoski

11 U.S.C. § 522(f) “establishes as the baseline, against which impairment is be measured, not an exemption to which the debtor ‘is entitled,’ but one to which he ‘would have been entitled.’” Owen v. Owen, 500 U.S. 305, 311 (1991). The Court applies a state exemption law in effect on the filling date of the bankruptcy petition rather than on the creation date of the lien.

Boskoski attempted to avoid a judgement lien recorded in 2014 against his home. The Court was asked to decide the Bankruptcy Code’s procedure for avoiding judgment liens that “impair[] an exemption to which the debtor would have been entitled,” 11 U.S.C. § (522(f)(1), interacts with California’s homestead exemption Cal. Civ. Proc. Code § 704.730. The issue was whether to apply the homestead exemption from 2014 when the lien was created or 2021 when bankruptcy was filed. Barclay argued that Section 522(f) “refer[s] primarily to the arithmetic calculation” and urges [the Court] to follow the “entire state law” and use the lien record in 2014. § 522(f) “establishes as the baseline, against which impairment is be measured, not an exemption to which the debtor ‘is entitled,’ but one to which he ‘would have been entitled.’” Owen v. Owen, 500 U.S. 305, 311 (1991). The Court applies a state exemption law on the filling date of the bankruptcy petition rather than on the creation date of the lien. Based on the reasoning in Owen, the Court found that Boskoski would have been entitled would have been entitled to claim the $600,000 homestead exemption in absence of the Greek Village lien. The Court held that the bankruptcy court applied the correct value. AFFIRMED.