Motion to Avoid Lien - Tennessee

UNITED STATES BANKRUPTCY COURT

☐ EASTERN ☐ MIDDLE ☐ WESTERN DISTRICT OF TENNESSEE

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 against the real property by registering a certified copy of the judgment or an abstract of judgment with the Register of Deeds of [____________] County, Tennessee, on [__/__/____] as Instrument/Book/Page No. [____________] (Tenn. Code Ann. § 25-5-101).

☐ 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 (Tennessee Opt-Out)

8. Tennessee has opted out of the federal bankruptcy exemptions of 11 U.S.C. § 522(d). See Tenn. Code Ann. § 26-2-112 (Tennessee citizens "are not authorized to claim as exempt the property described in" 11 U.S.C. § 522(d)). The Debtor must therefore claim Tennessee state exemptions (together with any applicable federal nonbankruptcy exemptions). The § 522(f) right to avoid liens nevertheless applies. The exemption the Debtor "could claim" supplies Line C of the § 522(f)(2)(A) calculation below.

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

☐ Homestead — Tenn. Code Ann. § 26-2-301, in the amount of $[____________]. As amended by 2021 Tenn. Acts ch. 301 (effective January 1, 2022), the basic homestead exemption is $35,000 for an individual and an aggregate of $52,500 for joint owners who both claim the exemption in the same proceeding (and $35,000 where only one joint owner is in the proceeding), on real property used by the individual, the individual's spouse, or a dependent as a principal place of residence. VERIFY the current amounts as of the petition date.

☐ Personal property (aggregate "wildcard") — Tenn. Code Ann. § 26-2-103, in the amount of $[____________] (up to the statutory aggregate, currently $10,000, in any personal property — verify).

☐ Other Tennessee exemption — [CITATION] (e.g., § 26-2-111 specific personal property; tools/implements), 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 register a certified copy of the order with the Register of Deeds of [____________] 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 or response with the Clerk and serve it on the undersigned within the time prescribed by the applicable Local Bankruptcy Rules and notice procedures.

☐ Pursuant to Local Bankruptcy Rule and the district's notice procedure, 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], Courtroom [____].

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], Tennessee BPR No. [________]
Attorney for Debtor
[FIRM NAME] · [ADDRESS] · [PHONE] · [EMAIL]

PROPOSED ORDER

UNITED STATES BANKRUPTCY COURT

☐ EASTERN ☐ MIDDLE ☐ WESTERN DISTRICT OF TENNESSEE

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 Tennessee law (Tennessee having opted out under Tenn. Code Ann. § 26-2-112). Accordingly,

IT IS ORDERED:

1. The Motion is GRANTED.

2. The lien of [CREDITOR NAME] ☐ registered on [__/__/____] as Instrument/Book/Page No. [____________] with the Register of Deeds of [____________] 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 registered with the Register of Deeds of [____________] County.

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

DATED: [__/__/____]

[____________________________________]
United States Bankruptcy Judge

TENNESSEE PRACTICE NOTES

Opt-out state. Tennessee is an opt-out state under Tenn. Code Ann. § 26-2-112 — the federal § 522(d) exemptions are unavailable. Debtors use Tennessee's statutory exemptions (Title 26, Chapter 2) and any applicable federal nonbankruptcy exemptions. Section 522(f) lien avoidance applies regardless of opt-out, because it is a federal right keyed to "an exemption to which the debtor would have been entitled," here the Tennessee exemption.

Homestead — Tenn. Code Ann. § 26-2-301 (current amounts). As amended by 2021 Tenn. Acts ch. 301 (eff. Jan. 1, 2022), the homestead exemption is $35,000 for an individual; $52,500 aggregate where joint owners both claim it in the same proceeding; and $35,000 where only one joint owner is in the proceeding. The 2021 amendment deleted the former age-62+ enhancement and the former separate minor-child enhancement (old subsections (e)/(f)). The only remaining minor-children provision is the survivorship clause on the death of a head of family. Older secondary sources still recite the pre-2022 figures ($5,000 / $7,500, with 62+ and minor-child tiers); do not rely on them — confirm the statute in force as of the petition date.

Tenancy by the entirety. Tennessee recognizes tenancy by the entirety. Where only one spouse files, entireties property may receive additional protection against the individual debts of the filing spouse (interacting with 11 U.S.C. § 522(b)(3)(B)). Analyze separately; it can affect the value of the debtor's "interest" on Lines C and E.

Personal property and the § 522(f)(1)(B) category. Tennessee provides an aggregate personal-property ("wildcard") exemption under § 26-2-103 (verify the current aggregate, commonly cited at $10,000) and specific exemptions under § 26-2-111 and related sections. A nonpossessory, nonpurchase-money security interest in the § 522(f)(1)(B) categories is avoidable to the extent it impairs the exemption the debtor could claim in those goods.

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. Where multiple judicial liens exist, address them in inverse order of priority.

Recording / perfection. A Tennessee judgment becomes a lien on the debtor's realty when a certified copy of the judgment or an abstract is registered with the county Register of Deeds (Tenn. Code Ann. § 25-5-101). Reference the registration instrument/book/page in the motion and order so the avoidance can be recorded to clear title.

Local procedure. Tennessee has three districts — Eastern (Knoxville, Chattanooga, Greeneville, Winchester), Middle (Nashville, Columbia, Cookeville), and Western (Memphis, Jackson). Confirm the district's local rules and the assigned judge's procedures for lien-avoidance motions, the negative-notice response period, and lodged-order requirements. Serve the creditor under Fed. R. Bankr. P. 7004.

Unsettled / verify points. (1) Current § 26-2-301 homestead amount and the status of any reinstated age/dependent enhancements as of the petition date; (2) current § 26-2-103 aggregate personal-property amount; (3) entireties treatment where only one spouse files; (4) the district's negative-notice period and any required notice language; (5) 11 U.S.C. § 522(b)(3)(A), (p), (q) where domicile or recently acquired equity is at issue.

SOURCES AND REFERENCES

• 11 U.S.C. § 522(f), (f)(2)(A) (lien avoidance; impairment formula).
• Fed. R. Bankr. P. 4003(d), 9014, 7004.
• Tenn. Code Ann. § 26-2-112 (opt-out from federal § 522(d) exemptions).
• Tenn. Code Ann. § 26-2-301 (homestead; $35,000 / $52,500 as amended by 2021 Tenn. Acts ch. 301, eff. 1/1/2022).
• Tenn. Code Ann. §§ 26-2-102, 26-2-103, 26-2-111 (personal property / aggregate exemptions).
• Tenn. Code Ann. § 25-5-101 (registration of judgment as lien on realty).
• United States Bankruptcy Courts for the E.D./M.D./W.D. Tenn. — Local Bankruptcy Rules.