(B.A.P. 6th Cir. June 20, 2017)
The Sixth Circuit B.A.P. holds that 11 U.S.C. § 522(f)(2)(C) does not preclude avoidance of mortgage deficiency judgment liens. Rather, based on the plain meaning of the statute, that section simply makes clear that entry of a judgment in a foreclosure action does not convert the underlying mortgage agreement into a judicial lien that may be avoided. Here, the bankruptcy court denied the debtor’s motion to avoid a deficiency judgment lien following a real property foreclosure action, stating that § 522(f)(2)(C) bars avoidance of a foreclosure deficiency judgment lien. The B.A.P. analyzes conflicting case law from multiple jurisdictions and reverses the bankruptcy court.
Attorney for Debtor: T. Robert Bricker
Author: Matt Lindblom