In Re Lucas

MEMORANDUM DECISION

Steven and Samantha Lucas (“Debtors”) seek to avoid liens of ITT Financial Services, formerly known as Aetna Finance Company (“Aetna”). 11 U.S.C. § 522 (f)(2)(A) permits a debtor to avoid non-possessory, non-purchase money security interests in, among other things, the debtor’s “household furnishings” and “household goods.” Aetna opposes the Debtors’ lien avoidance action on the ground that, under state law, the subject items of collateral do not qualify as “household furnishings” or “household goods.”

FACTS

Debtors filed a joint Chapter 7 petition and elected to utilize the exemption provisions of § 703.140(b) of the California Code of Civil Procedure (“CCP”). Each joint debtor has claimed a $500 jewelry exemption [CCP § 703.140(b)(4)]. The Debtors have not claimed a homestead exemption [CCP § 703.140(b)(1) ]. Instead, they have elected to apply this exemption to the provisions of CCP § 703.140(b)(5), California’s “catch-all” exemption. Under this provision, a debtor may exempt his interest in any property to the extent of $400, plus any unused portion of his homestead exemption (in this case, $7,500). The Debtors have exempted more than $7,900 worth of…