UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF KENTUCKY

CORBIN DIVISION

IN RE:

RALPH TIMOTHY COLLINS

KAREN ROSE COLLINS

DEBTORS CASE NO. 92-60240

MEMORANDUM OPINION

This matter is before the Court on the Motion to Avoid Judicial Lien on Exempt Property filed herein on August 3, 1994, by debtor Karen Rose Collins. The motion seeks to avoid the liens of Martin J. and Sandra K. Hampton ("the Hamptons") and of Tri-County National Bank. These are judicial liens on the debtor's permanent residence. She has claimed an exemption in this property. The Hamptons filed an Objection to Motion to Avoid Judicial Lien on August 9, 1994.

Simultaneously with her Motion to Avoid Judicial Lien on Exempt Property, the debtor had filed a Motion to Reopen. An Order sustaining the Motion to Reopen was entered on August 29, 1994. The debtor filed a Memorandum in Support of Motion to Avoid Judicial Lien on October 12, 1994. The Hamptons filed a Memorandum on October 24, 1994. Tri-County National Bank has never responded to the debtor's Motion to Avoid Judicial Lien.

Among the assets listed on the debtor's schedules is her residence at Lot 8, Tuit Acres Subdivision, Corbin, Kentucky. The market value of the property is listed at $70,000.00, with a first mortgage indebtedness against it in the amount of $64,636.24 owed to Corbin Deposit Bank. There are also judgment liens against the property in favor of the Hamptons in the amount of $34,993.87, and in favor of Tri-County National Bank in the amount of $4,822.51.

The debtor states that at the time the bankruptcy petition herein was filed, the debtors were married and held the above-referenced residence jointly. They therefore claimed a $10,000.00 homestead exemption pursuant to KRS 427.060. The liens held by the Hamptons and Tri-County National Bank impaired this exemption. The debtors later divorced and Karen Collins received the residence along with the mortgage debt on it. This is why only she has filed the Motion to Avoid Judicial Lien.

This Court has previously ruled on this issue in In re Powell, 173 B.R. 338 (Bkrtcy.E.D.Ky. 1994). Therein the Court found that a debtor is entitled to assert his homestead exemption, and therefore avoid a judicial lien where the amount of the mortgage plus the amount of the allowed exemption total more than the value of the property, which is the case herein. The Motion to Avoid Lien will be sustained by separate order.

Dated:

By the Court -

____________________________

Judge

Copies to:

Debtor

Marcia A. Smith, Esq.

Frank A. Atkins, Esq.

Wesley Tipton, Esq.