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Opinion 77

Case Name: 

In re Brundle

Judge: 
Judge Clark
Date: 
Apr-19-1983
Case Number(s): 
81C-1793
Status: 

UNPUBLISHED

Body: 

In her prepetition divorce action, debtor was awarded a $7,000 judgment against her ex-husband. Credit union, which held a judgment against debtor, obtained a garnishment judgment against debtor's ex-husband for the amount he owed to her. Debtor then filed a chapter 7 petition, in which she claimed the divorce award to be exempt. Postpetition, the state court reinstated credit union's garnishment judgment, which had previously been stayed, after ex-husband's appeal of the divorce award was denied. Debtor, who did not attempt to avoid credit union's lien on her divorce award, received a discharge in her bankruptcy. The court held that the garnishment lien survived debtor's bankruptcy, as it was still valid under the state court's prepetition stay order, which order allowed credit union to take action on the garnishment order after disposition of the appeal. However, the state court's postpetition reentry of the garnishment judgment violated the automatic stay, and was therefore void. The court held that credit union was free to enforce its lien, despite debtor's claim in bankruptcy that the divorce award was exempt, because 11 U.S.C. § 522(c)(2) permits enforcement of valid liens against exempt property. Debtor could still seek to avoid the lien under § 522(f), even post-discharge, but might be required to reimburse credit union's expenses as a condition of lien avoidance.

Internal Ref: 
Opinion 77
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