IN RE: LARRY P. STIDHAM WANDA F. STIDHAM CASE NO. 91-50019

UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF KENTUCKY

LEXINGTON

IN RE:

LARRY P. STIDHAM

WANDA F. STIDHAM CASE NO. 91-50019

DEBTOR

LARRY P. STIDHAM

WANDA F. STIDHAM PLAINTIFFS

v. ADV. NO. 94-5091

FORD MOTOR CREDIT DEFENDANT

MEMORANDUM OPINION

This matter is before the court on the motion of the plaintiff debtors for judgment on the pleadings, in effect a motion for summary judgment, on their complaint pursuant to 11 U.S.C. 524 for affirmative injunctive relief prohibiting enforcement of and compelling Ford Motor Credit Company to release its judgment lien of record in the Scott County Clerk's office.

. . . .

As noted by the Supreme Court in Local Loan Co. v. Hunt, 292 U.S. 234, 54 S. Ct. 695, 78 L. Ed. 1230 (1934), the discharge in bankruptcy granted to the debtors operates to extinguish debts retroactively to the date of the petition. Consequently, the unsecured portion of the debt represented by the judgment in favor of Ford Motor Credit Company was discharged as of January 4, 1991, the date the debtor filed their petition for relief under chapter 7 of the Bankruptcy Code. This was prior to the date the debtors acquired an interest in the real property at 111 Morgan Mill Drive, Georgetown, Kentucky on July 1, 1991.

To the extent the indebtedness of Ford Motor Credit Company was secured by the judgment lien on real property in which the debtors owned an interest on the date of bankruptcy, the lien was extinguished by the sale of those properties by the trustee in bankruptcy and in state foreclosure proceedings.

There is no longer any indebtedness owed by the debtors on the judgment referred to in the Notice of Judgment Lien. 11 U.S.C. 524(a)(1). The underlying judgment is void and did not survive bankruptcy except to the extent it was secured by a lien on the proceeds of sale of the Moon Lake property sold by the trustee in bankruptcy and the 712 Pocahontas Trail property, which was sold in the foreclosure action in state court. To the extent that the secured indebtedness of Ford Motor Credit Company survived bankruptcy under 11 U.S.C. 506(d) the secured indebtedness is now extinguished.

The debtors are entitled to the relief requested. An order shall be entered directing Ford Motor Credit Company to release its Notice of Judgment Lien of record in the Scott County Clerk's office.

Dated: January 11, 1995.

 

By the court -

 

 

 

Joe Lee, Chief Judge

 

Copies to:

James L. Hayden

Dean Langdon