Motion to Avoid Lien - Arkansas

UNITED STATES BANKRUPTCY COURT

☐ EASTERN ☐ WESTERN DISTRICT OF ARKANSAS

DEBTOR'S MOTION TO AVOID [JUDICIAL LIEN / NONPOSSESSORY, NONPURCHASE-MONEY SECURITY INTEREST] UNDER 11 U.S.C. § 522(f)

[DEBTOR NAME] (the "Debtor"), by and through undersigned counsel, respectfully moves this Court, pursuant to 11 U.S.C. § 522(f) and Federal Rules of Bankruptcy Procedure 4003(d) and 9014, for an order avoiding the lien described below to the extent it impairs an exemption to which the Debtor is entitled. In support, the Debtor states:

1. Jurisdiction and Authority

1. This Court has jurisdiction under 28 U.S.C. §§ 157 and 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(K).

2. The Debtor filed a voluntary petition under Chapter [____] of Title 11 on [__/__/____].

3. This Motion is brought under 11 U.S.C. § 522(f)(1), which permits a debtor to avoid the fixing of a lien on an interest of the debtor in property to the extent the lien impairs an exemption to which the debtor would have been entitled under 11 U.S.C. § 522(b). Procedure is governed by Fed. R. Bankr. P. 4003(d) and 9014, with service under Fed. R. Bankr. P. 7004.

2. The Lien To Be Avoided

4. The lien the Debtor seeks to avoid is held by the following creditor:

5. The lien is (check one):

☐ A judicial lien under 11 U.S.C. § 522(f)(1)(A), arising from a judgment entered in [COURT NAME], Case No. [____________], on [__/__/____], in the amount of $[____________], and perfected as a lien by recording/docketing with the Circuit Clerk of [COUNTY] County on [__/__/____] (judgment record/abstract entry [____________]) (Ark. Code Ann. § 16-65-117).

☐ A nonpossessory, nonpurchase-money security interest under 11 U.S.C. § 522(f)(1)(B) in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, jewelry, implements, professional books, tools of the trade, or prescribed health aids, created by a security agreement dated [__/__/____] in favor of the creditor.

6. The lien does not secure a domestic support obligation and is therefore not excepted from avoidance under 11 U.S.C. § 522(f)(1)(A)(i)–(ii).

3. The Property

7. The lien attaches to the following property in which the Debtor holds an interest:

4. The Claimed Exemption (Arkansas — Choice of Federal or State)

8. Arkansas permits a debtor to choose between (a) the federal bankruptcy exemptions of 11 U.S.C. § 522(d) and (b) the Arkansas constitutional and statutory exemptions (Ark. Const. art. 9; Ark. Code Ann. § 16-66-218). The debtor must elect one set; the elected set determines the exemption used in the § 522(f)(2)(A) impairment calculation.

9. The Debtor elected and claimed on Schedule C the following (check the applicable set and basis):

☐ FEDERAL EXEMPTIONS (11 U.S.C. § 522(d)):

☐ Homestead — § 522(d)(1), in the amount of $[____________] (statutory $31,575; adjusted every three years, next April 1, 2028 — VERIFY).

☐ Household goods — § 522(d)(3); ☐ tools of trade — § 522(d)(6); ☐ motor vehicle — § 522(d)(2); ☐ wildcard — § 522(d)(5), in the amount of $[____________].

☐ ARKANSAS STATE / CONSTITUTIONAL EXEMPTIONS:

☐ Homestead — Ark. Const. art. 9, §§ 3-6 and Ark. Code Ann. § 16-66-210, claimed in the amount of $[____________]. The Arkansas homestead is unlimited in value but limited by acreage: a rural homestead may not exceed 160 acres (and is protected at no less than 80 acres regardless of value); an urban homestead may not exceed one acre (and not less than one-quarter acre regardless of value), with a value cap of $2,500 only where the urban homestead exceeds one-quarter acre but is within the one-acre limit.

☐ Personal property / wildcard — Ark. Const. art. 9, §§ 1-2 and Ark. Code Ann. § 16-66-218(b) (e.g., $500 for a married person/head of family or $200 for a single person, plus clothing), claimed in the amount of $[____________].

☐ Other Arkansas exemption — [CITATION], in the amount of $[____________].

10. The exemption was claimed on Schedule C and ☐ has not been objected to / ☐ is the subject of [DESCRIBE]. ☐ An amended Schedule C is filed concurrently.

5. Impairment Under 11 U.S.C. § 522(f)(2)(A)

11. A lien impairs an exemption to the extent that the sum of (i) the lien sought to be avoided, (ii) all other liens on the property, and (iii) the exemption the debtor could claim absent any liens, exceeds the value the debtor's interest in the property would have in the absence of any liens. 11 U.S.C. § 522(f)(2)(A).

12. Applying the formula, the sum on Line D ($[____________]) exceeds the value on Line E ($[____________]). The lien therefore impairs the Debtor's exemption.

6. Extent of Avoidance

13. The lien is avoided as follows (check one):

☐ In its entirety. Because the impairment (Line F) equals or exceeds the amount of the lien (Line A), the lien is wholly avoided.

☐ In part. The lien is avoided in the amount of $[____________], and survives as a lien in the amount of $[____________].

7. Relief Requested

WHEREFORE, the Debtor respectfully requests that the Court:

(a) Enter an order avoiding the lien described above under 11 U.S.C. § 522(f) to the extent it impairs the Debtor's exemption;

(b) Declare the avoided lien void and of no further force or effect against the Debtor and the subject property, and provide that the Debtor or any party in interest may record/file a certified copy of the order with the Circuit Clerk of [COUNTY] County to clear the judgment record;

(c) Direct the creditor to release the lien of record within [____] days of the order; and

(d) Grant such other relief as is just and proper.

8. Notice and Opportunity to Object

14. NOTICE IS HEREBY GIVEN that any party opposing this Motion must file a written objection with the Clerk and serve it on the undersigned within the time prescribed by the applicable Local Rules and notice procedures.

☐ Pursuant to Local Rule, you have [____] days from the date of service to file and serve a written objection.

☐ If no objection is timely filed, the Court may grant the relief requested without a hearing.

☐ A hearing is scheduled for [__/__/____] at [____] [a.m./p.m.] before the Honorable [JUDGE NAME].

9. Certificate of Service

I certify that on [__/__/____], a true and correct copy of this Motion, supporting papers, and the proposed order was served on the parties below in the manner indicated, including service on the creditor in compliance with Fed. R. Bankr. P. 7004:

Dated: [__/__/____]

[____________________________________]
[ATTORNEY NAME], Arkansas Bar No. [________]
Attorney for Debtor
[FIRM NAME] · [ADDRESS] · [PHONE] · [EMAIL]

PROPOSED ORDER

UNITED STATES BANKRUPTCY COURT

☐ EASTERN ☐ WESTERN DISTRICT OF ARKANSAS

ORDER AVOIDING LIEN UNDER 11 U.S.C. § 522(f)

This matter came before the Court on the Debtor's Motion to Avoid Lien under 11 U.S.C. § 522(f). The Court finds that notice was adequate, that no timely objection was filed (or that any objection has been resolved or overruled), and that the lien impairs an exemption to which the Debtor is entitled under the exemption set elected by the Debtor. Accordingly,

IT IS ORDERED:

1. The Motion is GRANTED.

2. The lien of [CREDITOR NAME] ☐ recorded/docketed on [__/__/____] with the Circuit Clerk of [COUNTY] County (judgment record/abstract [____________]) / ☐ created by security agreement dated [__/__/____], on the property described as [____________________________________], is AVOIDED under 11 U.S.C. § 522(f):

☐ in its entirety; or ☐ in the amount of $[____________], leaving a surviving lien of $[____________].

3. The avoided lien is void and of no further force or effect against the Debtor and the subject property to the extent avoided. A certified copy of this Order may be filed with the Circuit Clerk of [COUNTY] County.

4. The creditor shall release the avoided lien of record within [____] days of entry of this Order.

DATED: [__/__/____]

[____________________________________]
United States Bankruptcy Judge

ARKANSAS PRACTICE NOTES

Choice state. Arkansas is not an opt-out state. A debtor may elect either the federal exemptions of 11 U.S.C. § 522(d) or the Arkansas constitutional/statutory exemptions (Ark. Const. art. 9; Ark. Code Ann. § 16-66-218). The election is all-or-nothing — a debtor cannot mix federal and state exemptions. Which set the debtor chooses drives the § 522(f)(2)(A) impairment math (the exemption "the debtor could claim" on Line C).

Arkansas homestead — value-unlimited, acreage-limited. Under Ark. Const. art. 9, §§ 3-6 and Ark. Code Ann. § 16-66-210, the Arkansas homestead is unlimited in dollar value but capped by acreage:

• Rural homestead: up to 160 acres, but in no event less than 80 acres regardless of value.
• Urban homestead: up to one acre, but in no event less than one-quarter acre regardless of value; where the urban homestead exceeds one-quarter acre (up to one acre), a $2,500 value cap applies.
  The homestead must be owned and occupied as a residence by a married person or the head of a family. Because value is otherwise unlimited within the acreage limits, a judicial lien on a qualifying Arkansas homestead typically impairs the exemption in full and is fully avoidable under § 522(f).

Federal homestead alternative. If the debtor elects § 522(d), the homestead is $31,575 (adjusted every three years; next adjustment April 1, 2028 — verify), plus the § 522(d)(5) wildcard. Debtors with limited home equity sometimes choose the federal set to capture the larger wildcard; debtors with substantial equity within the acreage limits usually choose the Arkansas homestead.

Personal property exemptions. Arkansas constitutional personal-property exemptions are modest (Ark. Const. art. 9, §§ 1-2; Ark. Code Ann. § 16-66-218(b): roughly $500 for a married person/head of family, $200 for a single person, plus wearing apparel). For household goods subject to a § 522(f)(1)(B) nonpossessory, nonpurchase-money security interest, the federal § 522(d)(3) household-goods exemption (if elected) is often more protective.

Section 522(f)(2)(A) mechanics. Add the lien to be avoided + all other liens + the exemption the debtor could claim, and compare to the value of the debtor's interest absent liens; the excess is the impairment and the lien is avoided to that extent. Address multiple judicial liens in inverse order of priority.

Local procedure. Arkansas has two federal districts — the Eastern District of Arkansas (Little Rock) and the Western District of Arkansas (Fayetteville/Fort Smith/El Dorado/Hot Springs/Texarkana); the two districts share a single bankruptcy court bench and largely uniform local procedures. File in the district of the debtor's domicile/venue. Follow the Local Rules and the assigned judge's procedures for negative-notice/objection periods, service, and order submission. Serve the creditor under Fed. R. Bankr. P. 7004.

Unsettled / verify points. (1) Current federal § 522(d) amounts; (2) the precise urban/rural acreage classification and any $2,500 urban-cap application; (3) the objection period under the Local Rules and whether the judge requires a hearing; (4) 11 U.S.C. § 522(b)(3)(A) domicile/730-day rule where the debtor recently moved to Arkansas.

SOURCES AND REFERENCES

• 11 U.S.C. § 522(f), (f)(2)(A) (lien avoidance; impairment formula).
• 11 U.S.C. § 522(b)(2), (b)(3), (d) (election; federal exemptions).
• Fed. R. Bankr. P. 4003(d), 9014, 7004.
• Ark. Const. art. 9, §§ 1-6 (homestead and personal property exemptions; acreage limits).
• Ark. Code Ann. § 16-66-210 (homestead procedure).
• Ark. Code Ann. § 16-66-218 (exemptions in bankruptcy; state alternative).
• Ark. Code Ann. § 16-65-117 (judgment lien on real property).
• United States Bankruptcy Court, Eastern and Western Districts of Arkansas — arb.uscourts.gov.