The Fourth Circuit Court of AppealsĀ 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 couldĀ 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."Ā Ā 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 VirginiaĀ where a "homestead deed"Ā has to be filed within 5 days after the Ā§ 341 Meeting, for the DebtorĀ to claim any "wildcard" exemption and has a once-per-lifetime $5000 cap. Botkin allows avoidance liens without having to claim theĀ homestead deed.Ā This may not be a significant is in other states,Ā because Schedule C can always be amended.Ā (Thanks to Dan Press for the Virginia clarification.)
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