William F. Sandoval Trust v. Taylor

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Debtor Mark Taylor sought to avoid a set of liens that the William F. Sandoval Irrevocable Trust (the “Trust”) recorded on his home, which Taylor jointly owned with his former wife. The Bankruptcy Code provided that a debtor may avoid certain liens that impair an exemption, and set forth a formula to determine the extent to which an exemption is impaired. At issue before the Tenth Circuit Court of Appeals was how that formula applied to a homestead exemption when a home is jointly owned with a non-debtor. Based on the plain language of 11 U.S.C. 522(f) and the structure of the Bankruptcy Code as a whole, the Court concluded the impairment calculation had to use the value of other liens on the home corresponding to the debtor’s percentage of ownership, rather than the full amount of the liens. View "William F. Sandoval Trust v. Taylor" on Justia Law