In Re Alton Wilson, Debtor. George S. Wynns v. Alton J. Wilson

We must decide whether a judicial lien impairs a California debtor’s automatic homestead exemption and therefore requires avoidance of the lien pursuant to 11 U.S.C. § 522 (f)(1). Our decision in this case is controlled by our holding in In re Chabot (City National Bank v. Chabot), 992 F.2d 891 (9th Cir.1993) and not by Congress’ subsequent amendment to the statute that overruled Chabot, but was not made retroactive. We reverse the district court’s judgment and hold that the bankruptcy court correctly denied avoidance of the lien.

FACTS

On January 3, 1994, appellee Alton J. Wilson filed a voluntary petition under Chapter 13 of the Bankruptcy Code. On that date, Wilson owned an undivided one-half interest as a joint-tenant in a residence located in Oakland, California. The other undivided one-half interest was owned by Wilson’s spouse.

On the petition date, the residence was encumbered by a first deed of trust in favor of Bank of America NT & SA that secured a debt in the sum of $14,067. The residence was further encumbered by a judgment lien for $14,548.61 that appellant George S. Wynns recorded on February 5, 1993. On the petition date, Wilson owed Wynns approximately…