IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
GORDON and VIRGINIA RANEY, No. 96-14371
The debtors seek to avoid several state tax liens as judicial liens pursuant to section
522(f)(1)(A). There are at least 20 reported cases refusing to avoid tax liens as judicial liens (see,
e.g., In re Ridgley
, 81 B.R. 65, 68 (Bkrtcy.D.Or.1987)), which is not surprising as the term
"judicial lien" is statutorily defined at section 101(36) of the Bankruptcy Code and clearly does
not encompass tax liens.
There is a single case which has avoided tax liens as judicial liens: In re Frost
, 111 B.R. 306
(Bkrtcy.C.D.Cal.1990). In that case, Bankruptcy Judge Eisen held that personal property tax
liens were avoidable because state law provided that such liens have the "force, effect, and
priority of a judgment lien." While the court has reservations about this holding, it would follow
in an uncontested motion such as this. However, the tax liens at issue in this case are primarily
sales tax liens (and one small income tax lien). Debtors have cited no similar statute to the one
relied upon in Frost
, but only a statute (Cal. Code of Civil Procedure section 688.030) which
provides that when property is levied upon pursuant to enforcement of a tax lien the debtor is
"entitled to the same exemptions to which a judgment debtor is entitled."
"Entitled to the same exemptions" is not the same thing as "force, priority and effect." The
sales tax and income tax liens are not judicial liens, and are therefore not avoidable under section
522(f)(1)(A). The motion will accordingly be denied. Debtors may submit a form of order.
Dated: May 27, 1998 _______________________
U. S. Bankruptcy