Motion to Avoid Lien - Nebraska

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEBRASKA

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 $[____________], which became a lien on the Debtor's real property by being entered/transcribed on the judgment records of the [COUNTY] County District Court (or filed with the [COUNTY] County Register of Deeds) on [__/__/____] as Document/Instrument No. [____________].

☐ 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 (Nebraska Opt-Out)

8. Nebraska has opted out of the federal bankruptcy exemptions of 11 U.S.C. § 522(d). See Neb. Rev. Stat. § 25-15,105 ("The federal exemptions provided in 11 U.S.C. 522, subsection (d), are hereby rejected by the State of Nebraska."). A Nebraska debtor therefore claims Nebraska exemptions (together with any applicable federal nonbankruptcy exemptions under 11 U.S.C. § 522(b)(3)). The exemption claimed determines the amount used in the § 522(f)(2)(A) impairment calculation; the § 522(f) avoidance right applies notwithstanding the opt-out.

9. The Debtor claimed on Schedule C the following Nebraska exemption (check the basis):

☐ Homestead — Neb. Rev. Stat. § 40-101, in the amount of $[____________]. The Nebraska homestead is exempt to $120,000 in value, consisting of the dwelling, appurtenances, and land (not exceeding 160 acres outside a city/village, or two contiguous lots within a city/village).

☐ Personal property / "in lieu of homestead" — Neb. Rev. Stat. § 25-1552, in the amount of $[____________] (the statutory sum, exclusive of wages). The § 25-1552 amount is adjusted by the Nebraska Department of Revenue every fifth year (beginning 2023) for CPI — VERIFY the current amount.

☐ Specific personal property — Neb. Rev. Stat. § 25-1556 (e.g., furniture/household goods, clothing, food and fuel, tools of trade, etc.), in the amount of $[____________].

☐ Other Nebraska / federal nonbankruptcy 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 [COUNTY] County Register of Deeds 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 or response with the Clerk and serve it on the undersigned within the time prescribed by the applicable Local Rules and notice procedures.

☐ Pursuant to the Local Rules, 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], [LOCATION].

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

PROPOSED ORDER

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEBRASKA

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 Nebraska exemption scheme (Nebraska having opted out under Neb. Rev. Stat. § 25-15,105). Accordingly,

IT IS ORDERED:

1. The Motion is GRANTED.

2. The lien of [CREDITOR NAME] ☐ entered/recorded on [__/__/____] as Document/Instrument No. [____________] / ☐ 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 [COUNTY] County Register of Deeds.

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

DATED: [__/__/____]

[____________________________________]
United States Bankruptcy Judge

NEBRASKA PRACTICE NOTES

Opt-out state. Nebraska is an opt-out state under Neb. Rev. Stat. § 25-15,105 — the federal § 522(d) exemptions are unavailable. Debtors use Nebraska's exemptions, supplemented by federal nonbankruptcy exemptions under 11 U.S.C. § 522(b)(3)(A). The exemption "the debtor could claim" (Line C of the § 522(f)(2)(A) formula) is the Nebraska figure.

Homestead — § 40-101. The Nebraska homestead is exempt to $120,000 in value (as amended by Laws 2024, LB1195), limited to the dwelling and either 160 acres outside a city/village or two contiguous lots inside one. Verify the current statutory amount as of the petition date. A judicial lien (e.g., a docketed/transcribed judgment) on the homestead is avoidable to the extent it impairs the § 40-101 exemption.

In-lieu and personal property — §§ 25-1552, 25-1556. A debtor without a homestead may claim the § 25-1552 in-lieu-of-homestead personal-property exemption (CPI-adjusted every fifth year beginning 2023; verify the current amount). Section 25-1556 lists specific personal-property exemptions (household goods/furniture, clothing, tools of trade, food/fuel, etc.). A homestead claimant generally cannot also use the § 25-1552 in-lieu exemption. Wages are governed separately by § 25-1558.

Judicial-lien fixing. In Nebraska, a money judgment becomes a lien on the debtor's real property in a county when entered on the district court's judgment records (or as otherwise provided by statute). Reference the judgment-record entry / register-of-deeds filing in describing the lien.

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 up to that amount. Address multiple judicial liens in inverse order of priority.

Local procedure. Nebraska is a single district — the United States Bankruptcy Court for the District of Nebraska (Omaha and Lincoln). Confirm the lien-avoidance motion, notice/objection period, and lodged-order requirements under the District's Local Rules (Neb. R. Bankr. P.) and the assigned judge's procedures. Serve the creditor under Fed. R. Bankr. P. 7004.

Unsettled / verify points. (1) Current § 40-101 homestead amount and current § 25-1552 CPI-adjusted figure; (2) whether the District/judge permits negative notice or requires a hearing, and the current objection period; (3) 11 U.S.C. § 522(b)(3)(A) domicile rules and § 522(p)/(q) caps where domicile or recently acquired equity is at issue; (4) interaction of the homestead and in-lieu exemptions for a particular debtor.

SOURCES AND REFERENCES

• 11 U.S.C. § 522(f), (f)(2)(A) (lien avoidance; impairment formula).
• Fed. R. Bankr. P. 4003(d), 9014, 7004.
• Neb. Rev. Stat. § 25-15,105 (opt-out; federal § 522(d) exemptions rejected).
• Neb. Rev. Stat. § 40-101 (homestead exemption — $120,000; amended Laws 2024, LB1195).
• Neb. Rev. Stat. § 25-1552 (personal property / in-lieu-of-homestead exemption; CPI adjustment every fifth year from 2023).
• Neb. Rev. Stat. § 25-1556 (specific personal property exemptions).
• Neb. Rev. Stat. § 25-1558 (wage exemption).
• United States Bankruptcy Court for the District of Nebraska — Local Rules (neb.uscourts.gov).