In 2015, D filed a declaration of homestead with the Norfolk Registry of Deeds. In 2020, D filed for relief in the Bankruptcy Court pursuant to Chapter 7 of the Code. D resided in a non-opt-out state and elected the federal exemptions, which (currently) limits the homestead to $25,150.

The parties have stipulated that the fair market value of the residential property is $250,000. The property is subject to a mortgage to Randolph Savings Bank in the amount of $200,000 and a judgment lien in favor of Rockland Trust Company ("Rockland") in the amount of $65,000.

(a) D has filed a Motion to Avoid Lien pursuant to 11 U.S.C. § 522(f)(1)(A), in which he asserted that the Rockland judgment lien impairs his exemption in his residence. What results? 

(b) Would it make a difference if the Rockland lien attached to D's property simultaneous with D's acquisition of the property? Hint: "yes." See Marine Midland Bank v. Scarpino (In re Scarpino), 113 F.3d 338 (2d Cir. 1997). PLEASE REFERENCE THE CASE 

(c) Now go back to the facts of Part (a) and suppose there is an additional judgment lien of $15,000 filed subsequent to the Rockland lien? What result?

(d) Does your answer to question (c) change at all if the $15,000 lien filed after the Rockland lien is a consensual mortgage?

Answer rating: 100% (QA)

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