CRP Holdings, A-1, LLC v. O’Sullivan

The Eighth Circuit affirmed the Bankruptcy Appellate Panel's decision affirming the bankruptcy court's order holding that CRP has an unenforceable judicial lien against the real property of debtor and avoiding that lien under 11 U.S.C. 522(f)(1). The court held that, under Missouri law, CRP's notice of foreign judgment did not give rise to a lien on debtor's exempt homestead property because he owned it jointly with his spouse. The court held that the foreign judgment created a cloud on title under Missouri law sufficient to constitute a charge against or interest in debtor's property under the Bankruptcy Code. Therefore, the cloud on title created by CRP's recording of its judgment fastened an existing, but presently unenforceable lien on the property. Accordingly, the court held that application of section 522(f) would clear the cloud on title to debtor's property and thus the bankruptcy court properly granted debtor's motion to avoid the lien. View "CRP Holdings, A-1, LLC v. O'Sullivan" on Justia Law