The Fourth Circuit Court of Appeals held that "the Code plainly provides" that a debtor does not have to actually claim an exemption in order to use Code section 522(f) to avoid a judicial lien that impairs the exemption. In fact, in the Court of Appeals' view, it did not appear that the debtor could even claim an exemption prior to lien avoidance: "the Code's plain language does not even appear to allow a debtor to claim an exemption at a time when the existence of a lien is preventing the property from being exempt." The language of the Code plainly does not require a debtor to claim an exemption in order to avoid a judicial lien on the basis that it impairs the exemption.
This is particularly important in Virginia where a "homestead deed" has to be filed within 5 days after the § 341 Meeting, for the Debtor to claim any "wildcard" exemption and has a once-per-lifetime $5000 cap. Botkin allows avoidance liens without having to claim the homestead deed. This may not be a significant is in other states, because Schedule C can always be amended. (Thanks to Dan Press for the Virginia clarification.)
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