Local Rule 4003-2: AVOIDING JUDICIAL LIENS THAT IMPAIR AN EXEMPTION

RULE 4003-2. AVOIDING JUDICIAL LIENS THAT IMPAIR AN EXEMPTION.

(a) Motion to Avoid a Judicial Lien under § 522(f) in a Chapter 7 or 12 Case. In a chapter 7 case, a motion to avoid a judicial lien that impairs an exemption must be filed before the case is closed. In a chapter 12 case, the motion must be filed in time to be heard at or before the date of the confirmation hearing. In both instances, the debtor must attach to the motion a copy of the judgment order with proof of perfection and include in the motion:

(1) a clear description of the property subject to the lien in question,

(2) the value of the property,

(3) the basis for the property valuation,

(4) the name and address of each entity that holds a lien of record against the property and the recording reference for each lien (including town, book, page and date of recording),

(5) the amount due on each lien,

(6) the amount of the claimed exemption, and

(7) the basis for alleging the lien to be avoided is a judicial lien.

(b) Identification of Judicial Liens Subject to Avoidance in a Chapter 12 Plan. In a chapter 12 case, the debtor must (1) identify in the chapter 12 plan any judicial lien they seek to avoid under § 522(f), (2) include in their list of unsecured debt the amount of the claim underlying that lien, and (3) include that claim in their projection of the minimum dividend for general unsecured creditors. The debtor must specify the treatment of the lien and underlying debt in both the chapter 12 plan and the confirmation order.

(c) Motion to Avoid a Judicial Lien under § 522(f) in a Chapter 13 Case. A motion under § 522(f) in a chapter 13 case must be made in Part 3.4 (and noted on Part 1.1) of the debtor's plan. See Local Rule 3015-1; see also Official Form 113.

(d) Contents of the Motion to Avoid a Judicial Lien in a Chapter 13 Case. In addition to the information required by Part 3.4 of Official Form 113, the debtor must attach to the motion:

(1) a copy of the judgment order with proof of perfection,

(2) a certificate of service,

(3) a proposed order, and

(4) a notice of motion setting the hearing for a date prior to the plan confirmation date if possible.

(e) Orders Granting Motions to Avoid Judicial Liens in Chapter 12 and 13 Cases. Unless the Court approves different terms after notice to the lien holder and the case trustee, every proposed order avoiding a judicial lien under § 522(f) must

(1) specify that the lien is avoided only if the case is not dismissed,

(2) state that if the case is dismissed, the order granting the motion to avoid the lien is void,

(3) state that the order is conditional and of no effect unless it contains a certification by the case trustee that the debtor satisfied all of their obligations in the case and the case was not dismissed, and

(4) include the following trustee certification language if the case is pending under chapters 12 or 13 as of the date the proposed order is filed:

Certification of Chapter 12/13 Trustee I, [name], the Chapter 12/13 Standing Trustee for the District of Vermont, hereby certify under penalty of perjury under the laws of the United States of America that the Debtor has completed his/her Chapter 12/13 Plan.

Dated: ____________ ____[signature]_____ Chapter 12/13 Trustee