__NOTOC__ Owen v. Owen, , was a United States Supreme Court case in which the court held that the Bankruptcy Code's Section 522(f) allows a judicial lien to be eliminated even when a state's bankruptcy policy has defined exempt property to exclude property encumbered by a judicial lien.. David Gray Carlson, Security Interests on Exempt Property after the 1994 Amendments to the Bankruptcy Code, 4 Am. Bankr. Inst. L. Rev. 57 (Spring 1996). Scott Everett, Debtors' Delight - Bankruptcy Reform Act of 1994: How Revisions to 11 U.S.C. 522(f) Affect Debtors' Ability to Avoid Liens Which Impair Texas Personal Property Exemptions, 26 Tex. Tech L. Rev. 1331 (1995). George M. Prescott Jr., Amphisbaena - How 11 U.S.C. 522(c) Expands and Contracts State-Law Exemptions in Bankruptcy, 9 Am. Bankr. Inst. L. Rev. 435 (Spring 2001).
Background
The Bankruptcy Code allows States to define what property is exempt from the bankruptcy estate that will be distributed among the debtor's creditors. The Florida Constitution provides a homestead exemption, which the state courts have held inapplicable to liens that attach before the property in question acquires its homestead status.
Dwight Owen purchased his Florida condominium in 1984 subject to Helen Owen's preexisting judgment lien, and the property first qualified as a homestead under a 1985 amendment to Florida's homestead law. After Dwight filed a Chapter 7 petition for bankruptcy in 1986, the Bankruptcy Court, among other things, sustained his claimed homestead exemption in the condominium, but it subsequently denied his post-discharge motion to avoid Helen's lien pursuant to Bankruptcy Code § 522(f). By that time, Dwight and Helen were divorced. The federal District Court and the Eleventh Circuit Court of Appeals affirmed the Bankruptcy Court's ruling, holding that, since the lien had attached before the condominium qualified for the homestead exemption, the property was not exempt under state law.
The Supreme Court granted certiorari.
Opinion of the court
The Supreme Court issued an opinion on May 23, 1991.
Later developments
References
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