Motion to Avoid Lien - Colorado

UNITED STATES BANKRUPTCY COURT

DISTRICT OF COLORADO

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 a transcript of judgment with the Clerk and Recorder of [COUNTY] County on [__/__/____] at Reception No. [____________] (Book [____], Page [____]) (C.R.S. § 13-52-102).

☐ 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 (Colorado Opt-Out)

8. Colorado has opted out of the federal bankruptcy exemptions of 11 U.S.C. § 522(d). See C.R.S. § 13-54-107. A debtor domiciled in Colorado claims the exemptions allowed under Colorado law together with any applicable federal nonbankruptcy exemptions (11 U.S.C. § 522(b)(2), (b)(3)). The federal § 522(d) set is not available. The § 522(f) right to avoid liens applies regardless of the opt-out.

9. The Debtor claimed the following exemption on Schedule C in the property described above (check the applicable basis):

☐ Homestead — C.R.S. § 38-41-201, in the amount of $[____________] (statutory amount $250,000, or $350,000 if the homestead is occupied as a home by an owner, an owner's spouse, or a dependent who is elderly (60 or older) or has a disability — VERIFY current amounts as of the petition date; Colorado amounts change only by legislation).

☐ Household goods — C.R.S. § 13-54-102(1)(e), in the amount of $[____________].

☐ Motor vehicle — C.R.S. § 13-54-102(1)(j), in the amount of $[____________].

☐ Tools of the trade / professional equipment — C.R.S. § 13-54-102(1)(i), (k), in the amount of $[____________].

☐ Other Colorado 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 a certified copy of the order with the Clerk and Recorder of [COUNTY] County to clear title;

(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 of the United States Bankruptcy Court for the District of Colorado and serve it on the undersigned within the time prescribed by the applicable Local Bankruptcy Rules and notice procedures.

☐ Pursuant to L.B.R. 9013-1, 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], Colorado Attorney Reg. No. [________]
Attorney for Debtor
[FIRM NAME] · [ADDRESS] · [PHONE] · [EMAIL]

PROPOSED ORDER

UNITED STATES BANKRUPTCY COURT

DISTRICT OF COLORADO

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 Colorado law (C.R.S. § 13-54-107 opt-out). Accordingly,

IT IS ORDERED:

1. The Motion is GRANTED.

2. The lien of [CREDITOR NAME] ☐ recorded on [__/__/____] at Reception No. [____________] (Book [____], Page [____]) with the Clerk and Recorder of [COUNTY] County / ☐ 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 recorded with the Clerk and Recorder 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

COLORADO PRACTICE NOTES

Opt-out, not choice. Colorado is an opt-out state under C.R.S. § 13-54-107 — the federal § 522(d) exemptions are unavailable. Debtors use the Colorado statutory exemptions plus any federal nonbankruptcy exemptions. The § 522(f) lien-avoidance right is independent of the opt-out.

Homestead — C.R.S. § 38-41-201. Protects up to $250,000 in equity in a home (including a mobile or manufactured home) the debtor occupies, increased to $350,000 if the home is occupied by an owner, the owner's spouse, or a dependent who is elderly (60 or older) or has a disability. The 2022 amendments raised the amounts to these levels (from $75,000/$105,000). Colorado has no automatic indexing — amounts change only by legislation, so verify the current figure as of the petition date. Spouses may not double the homestead. The homestead exemption extends to identifiable cash proceeds for a limited period (C.R.S. § 38-41-201.6).

Personal property — C.R.S. § 13-54-102. Includes household goods, a motor vehicle (with a higher amount for the elderly or disabled), tools of the trade/professional equipment, and other categories. Amounts vary; verify.

Section 522(f)(1)(B) and household goods. A nonpossessory, nonpurchase-money security interest in the § 522(f)(1)(B) categories is avoidable to the extent it impairs the Colorado household-goods exemption (C.R.S. § 13-54-102(1)(e)).

Section 522(f)(2)(A) mechanics. Add the lien to be avoided + all other liens + the exemption the debtor could claim, compared 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. Note the federal § 522(p)/(q) homestead cap ($214,000 for cases filed April 1, 2025–March 31, 2028) for equity acquired within 1,215 days prepetition — relevant given Colorado's generous homestead.

Local procedure. File in the United States Bankruptcy Court for the District of Colorado (Denver). Follow the District of Colorado Local Bankruptcy Rules (e.g., L.B.R. 4003-1 on lien avoidance and L.B.R. 9013-1 on negative-notice motions) and the assigned judge's procedures for the objection period, service, and order submission. Serve the creditor under Fed. R. Bankr. P. 7004.

Unsettled / verify points. (1) Current homestead amount and whether the $350,000 elderly/disabled tier applies; (2) current personal-property amounts; (3) the L.B.R. negative-notice objection period and any hearing requirement; (4) 11 U.S.C. § 522(b)(3)(A) domicile rule and § 522(p)/(q) caps.

SOURCES AND REFERENCES

• 11 U.S.C. § 522(f), (f)(2)(A) (lien avoidance; impairment formula).
• Fed. R. Bankr. P. 4003(d), 9014, 7004.
• C.R.S. § 13-54-107 (Colorado opt-out).
• C.R.S. § 38-41-201 (homestead; $250,000 / $350,000 elderly or disabled).
• C.R.S. § 38-41-201.6 (homestead in proceeds).
• C.R.S. § 13-54-102 (personal property exemptions).
• C.R.S. § 13-52-102 (judgment lien — transcript of judgment).
• United States Bankruptcy Court for the District of Colorado, Local Bankruptcy Rules — cob.uscourts.gov.