Motion to Avoid Lien - Delaware

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

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

The above-named Debtor(s) (the "Debtor"), by and through ☐ undersigned counsel ☐ pro se, respectfully move(s) this Court under 11 U.S.C. § 522(f) and Federal Rules of Bankruptcy Procedure 4003(d) and 9014 for entry of an order avoiding the ☐ judicial lien ☐ nonpossessory, nonpurchase-money security interest described below, which 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) (determinations of the validity, extent, or priority of liens).

2. The statutory predicate for the relief requested is 11 U.S.C. § 522(f), which permits a debtor to 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 11 U.S.C. § 522(b).

3. This Motion is brought by motion in accordance with Federal Rule of Bankruptcy Procedure 4003(d), and is governed as a contested matter by Federal Rule of Bankruptcy Procedure 9014.

4. The Debtor filed a voluntary petition for relief under Chapter [____] of Title 11 on [__/__/____], and claimed the exemption at issue on Schedule C ☐ as originally filed ☐ as amended on [__/__/____].

2. The Lien To Be Avoided

5. The lien the Debtor seeks to avoid is held by:

6. If a judicial lien (§ 522(f)(1)(A)): The lien arises from a judgment entered in favor of the creditor and against the Debtor:

7. If a security interest (§ 522(f)(1)(B)): The interest is a nonpossessory, nonpurchase-money security interest in one or more of the following categories of property in which a § 522(f)(1)(B) interest may be avoided: ☐ household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments held primarily for personal, family, or household use; ☐ implements, professional books, or tools of the trade; ☐ professionally prescribed health aids. Date of security agreement: [__/__/____]. Description of collateral: [____].

8. The lien is not a judicial lien securing 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

9. The lien attaches to the following property of the Debtor (the "Property"):

4. The Claimed Exemption (Delaware — Opt-Out State)

10. Delaware has opted out of the federal bankruptcy exemptions. Under 10 Del. C. § 4914(a), an individual debtor domiciled in Delaware "is not authorized or entitled to elect the federal exemptions as set forth in § 522(d)" and may exempt only the property allowed by Delaware law (together with the federal nonbankruptcy exemptions preserved by 11 U.S.C. § 522(b)(3)).

11. The Debtor claims the following exemption in the Property:

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

12. Under 11 U.S.C. § 522(f)(2)(A), 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 amount of the exemption the debtor could claim absent any liens, exceeds the value that the debtor's interest in the property would have in the absence of any liens.

13. Applying the formula to the Property:

14. ☐ Full avoidance. Line F equals or exceeds Line A; the entire lien impairs the exemption and is avoidable in full.

☐ Partial avoidance. Line F is greater than zero but less than Line A; the lien is avoidable to the extent of $[____] (Line F), and survives as to the balance.

☐ No avoidance. Line F is zero or negative; the lien does not impair the exemption.

6. Relief Requested

WHEREFORE, the Debtor respectfully requests that the Court:

a. Enter an order avoiding the ☐ judicial lien ☐ security interest described above, in whole or to the extent it impairs the Debtor's exemption under 11 U.S.C. § 522(f);

b. Declare the lien void and of no effect as against the Debtor and the Property to the extent avoided;

c. Provide that, upon entry of the order and ☐ the closing of the case ☐ entry of discharge, the lien is released of record, and that a certified copy of the order may be recorded to effect the release;

d. Preserve the Debtor's exemption in the Property; and

e. Grant such other and further relief as is just and proper.

7. Notice and Opportunity to Object

15. ☐ Negative notice. PLEASE TAKE NOTICE that any response or objection to this Motion must be filed with the Clerk and served on the undersigned within [____] days of the date of service of this Motion. If no objection is timely filed, the Court may grant the relief requested without a hearing.

☐ Notice of hearing. PLEASE TAKE NOTICE that a hearing on this Motion will be held on [__/__/____] at [____] [a.m./p.m.] before the Honorable [____], United States Bankruptcy Judge, at [COURTROOM / LOCATION].

8. Certificate of Service

I certify that on [__/__/____] a true and correct copy of this Motion, any supporting papers, and the proposed order was served on the parties below by the method indicated:

Signature: ___________________________ Date: [__/__/____]

PROPOSED ORDER

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

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

Upon the Debtor's Motion to Avoid Lien under 11 U.S.C. § 522(f) (the "Motion"), and due notice having been given, and ☐ no objection having been filed ☐ the objection of [____] having been overruled ☐ the matter having been resolved by agreement, and good cause appearing, it is hereby ORDERED:

1. The Motion is GRANTED.

2. The ☐ judicial lien ☐ nonpossessory, nonpurchase-money security interest of [CREDITOR], in the amount of $[____], ☐ recorded/docketed on [__/__/____] at [____] ☐ arising under the security agreement dated [__/__/____], is AVOIDED pursuant to 11 U.S.C. § 522(f) ☐ in full ☐ to the extent of $[____], as impairing the Debtor's exemption in the following property:

[PROPERTY DESCRIPTION]

3. To the extent avoided, the lien is void and of no effect as against the Debtor and the Property, and a certified copy of this Order may be recorded to effect its release of record.

4. The Debtor's exemption in the Property is preserved.

SO ORDERED.

Dated: [__/__/____] ___________________________
United States Bankruptcy Judge

DELAWARE PRACTICE NOTES

These notes are general background, not legal advice. Confirm every figure and procedure before filing.

Opt-out: Delaware exemptions only

Delaware is an opt-out state. Under 10 Del. C. § 4914(a), a debtor domiciled in Delaware cannot elect the federal § 522(d) exemptions and must claim Delaware's state exemptions (plus the federal nonbankruptcy exemptions preserved by 11 U.S.C. § 522(b)(3)). The § 522(f) impairment formula in line 12 above uses the Delaware exemption amount the debtor could claim. There is no "federal vs. state" election to make.

Homestead and key exemption amounts (verify)

• Homestead / principal residence — 10 Del. C. § 4914(c)(1): As of January 1, 2025, $200,000 in equity in a principal residence (raised from $125,000 by HB 318, 152nd Gen. Assembly). In a joint case the residence cap is a combined figure rather than per-debtor doubling — read § 4914(d) carefully.
• Vehicle and tools of the trade — 10 Del. C. § 4914(c)(2): $25,000 each.
• General personal property / non-residence real-property equity — 10 Del. C. § 4914(b): aggregate $25,000 (applies separately to each debtor in a joint case under § 4914(d)).
• Additional personal property — 10 Del. C. § 4902 (e.g., books, family pictures, clothing, tools) and the head-of-family wildcard — 10 Del. C. § 4903 ($500).
• Delaware exemption figures are set by statute and change by legislation (no automatic CPI indexing). Always confirm the current amounts.

§ 522(f) mechanics

• § 522(f)(1)(A) reaches judicial liens — most commonly judgment liens recorded against the debtor's real property. It does not reach consensual liens (mortgages, purchase-money security interests), most statutory liens, or judicial liens securing a domestic support obligation.
• § 522(f)(1)(B) reaches nonpossessory, nonpurchase-money security interests in defined household goods, tools of the trade, and health aids — e.g., a lender's blanket lien on already-owned furniture taken to secure a separate loan.
• The impairment test is the arithmetic formula in § 522(f)(2)(A) as construed in Owen v. Owen, 500 U.S. 305 (1991), and codified after Owen. A judicial lien against a residence can be avoided even where some equity exists, so long as the formula shows impairment; and it may be avoided entirely where the senior liens plus the exemption already exceed the value.
• Avoidance is measured as of the petition date based on petition-date value and exemption entitlement.

Local procedure (verify)

• Delaware has a single bankruptcy district: the United States Bankruptcy Court for the District of Delaware (Wilmington). Check the District's Local Rules and the assigned judge's chambers procedures for the form of § 522(f) motions, whether negative-notice treatment is available, the objection period, and proposed-order submission.
• Service on the lienholder must satisfy FRBP 7004 (e.g., service on an officer or registered agent; the special rules for insured depository institutions).
• If the avoided lien is a recorded judgment lien, retain the entered order to clear title; a certified copy is typically recorded with the county Recorder of Deeds (New Castle, Kent, or Sussex County).

Flag — unsettled / fact-specific points

• Joint cases and the residence cap. Whether and how the homestead amount is shared in a joint case turns on § 4914(d); analyze before assuming per-debtor doubling.
• Tenancy by the entirety. Entireties property may carry separate protection against the debts of one spouse; this can interact with both the exemption analysis and the § 522(f) calculation.
• Valuation disputes are the most common ground of objection. Be prepared to support fair market value and senior-lien balances with evidence.

SOURCES AND REFERENCES

• 11 U.S.C. § 522(f) (lien avoidance); § 522(f)(1)(A) (judicial liens); § 522(f)(1)(B) (security interests); § 522(f)(2)(A) (impairment formula); § 522(b)(2)–(3) (opt-out).
• Fed. R. Bankr. P. 4003(d) (lien avoidance by motion), 9014 (contested matters), 7004 (service).
• 10 Del. C. § 4914 (Delaware bankruptcy exemptions; opt-out; homestead, vehicle, tools).
• 10 Del. C. §§ 4902, 4903, 4915 (personal property; head-of-family wildcard; retirement).
• HB 318, 152nd Delaware General Assembly (increasing homestead to $200,000 and vehicle/tools to $25,000 each; effective Jan. 1, 2025).
• Owen v. Owen, 500 U.S. 305 (1991) (impairment is measured against the exemption the debtor could claim).
• United States Bankruptcy Court for the District of Delaware — Local Rules and chambers procedures (confirm current version).