Abdullah Qari and Rahela Jalal Qari

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 05-44325 TM
Chapter 7
ABDULLAH QARI and RAHELA
JALAL QARI,
Debtors.
___________________________/
MEMORANDUM OF DECISION RE MOTIONS TO AVOID JUDICIAL LIENS
The 	above-captioned 	debtors 	(the 	“Debtors”) 	filed 	motions 	to
avoid the judicial liens of Patelco Credit Union (“Patelco”) on their
residence 	(the 	“Residence”) 	on 	the 	ground 	that 	the 	liens 	impaired
their 	homestead 	exemption. 	See 	11 	U.S.C. 	§ 	522(f)(1)(A). 	Patelco
opposed the motion and asked the Court, if it granted the motion, to
stay 	the 	effectiveness 	of 	the 	order 	until 	its 	nondischargeability
proceeding 	was 	completed. 	The 	Debtors 	opposed 	this 	request 	on 	the
ground that there was no legal basis for doing so and to do so would
Signed: July 07, 2006
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
July 07, 2006
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 05-44325 Doc# 42 Filed: 07/07/06 Entered: 07/07/06 14:31:55 Page 1 of 5

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1The Debtors scheduled the value of the Residence at $570,000
and, in support of their motions, provided an appraisal as of the
petition date supporting this valuation. 	At the hearing on the
motions, they informed the Court that they have entered into an
agreement to sell the Residence for $725,000.
2
interfere with their pending sale of the Residence. 1 	The Court took
the motions under submission.
Having reviewed the filings in the case and the applicable law,
the 	Court 	agrees 	with 	the 	Debtors 	that 	there 	is 	no 	legal 	basis 	for
delaying the effectiveness of an order granting a motion to avoid a
judgment lien under 11 U.S.C. § 522(f) on the ground that the claim
underlying 	the 	judgment 	is 	or 	may 	be 	determined 	to 	be
nondischargeable. 	The 	Court 	will 	grant 	the 	motion 	as 	to 	the 	more
junior 	of 	the 	two 	judgment 	liens. 	However, 	the 	Court 	is 	unable 	to
grant the motion as to the more senior of the two judgment liens at
this 	time 	due 	to 	the 	Court’s 	uncertainty 	as 	to 	the 	amounts 	of 	the
other liens on the Residence.
The 	Debtors 	contended 	that 	Patelco’s 	judgment 	liens 	should 	be
avoided 	in 	their 	entirety. 	According 	to 	the 	Court’s 	calculations,
using the numbers set forth in the Debtors’ motions, $18,000 of the
senior 	Patelco 	judgment 	lien 	was 	not 	avoidable. 	The 	difference
appears 	to 	relate 	to 	a 	scheduled 	judgment 	lien 	in 	favor 	of 	Safe
Credit Union (“Safe”) which is not mentioned in the Debtors’ motions
(although 	it 	is 	mentioned 	in 	Patelco’s 	opposition 	to 	the 	motions).
The 	Court 	is 	uncertain 	whether 	the 	Safe 	judgment 	lien 	is 	still 	or
ever was a valid lien on the Residence.
Case: 05-44325 Doc# 42 Filed: 07/07/06 Entered: 07/07/06 14:31:55 Page 2 of 5

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2At the hearing, Patelco explained that, in its view, the Safe
judgment lien, which it contended was recorded after its judgment
liens, could not be included in the calculation. 	The Debtors
argued that, in any event, the Safe judgment lien was recorded
before the Patelco judgment liens. 	However, neither party could
supply the Court with support for their position as to when the
Safe judgment lien was recorded. 	Having reviewed the underlying
filings, the Court notes that, according to the Debtors’ filings,
the Safe judgment lien was recorded after the Patelco judgment
liens. 	However, Patelco’s contention that, in calculating whether
a judgment lien impairs a homestead exemption, junior liens are not
counted is clearly in error. 	See 11 U.S.C. § 522(f)(2)(A). The
case cited by Patelco in support of its contention, In re Silveira,
141 F.3d 34 (1 st Cir. 1998), is inapposite.
3In their motions, the Debtors state that the Trustee has
“effectively” abandoned the Residence. 	By this, they apparently
mean that he should be treated as having abandoned it. 	The Trustee
has not affirmatively abandoned the Residence by noticing his
intention to do so to creditors, and the case has not been closed.
Therefore, the Residence is still property of the estate. 	See 11
3
The Court notes that, in the fall of 2005, the Debtors filed an
adversary proceeding against Safe contending that the Safe judgment
lien 	did 	not 	attach 	to 	the 	Residence 	because 	the 	judgment 	was 	only
against 	Mr. 	Qari 	whereas 	the 	Residence 	is 	held 	in 	the 	sole 	name 	of
Mrs. Qari. 	This proceeding was apparently settled and the adversary
proceeding dismissed. 	Even if the Safe lien is a valid judgment lien
against the property, depending on the terms of the settlement, the
Debtors may be judicially estopped from relying on the Safe judgment
lien to avoid the senior Patelco judgment lien in its entirety. 2
In 	addition, 	the 	Court 	notes 	that 	the 	Debtors 	are 	under 	the
misapprehension that they are empowered to sell the Residence at this
time. 	They are not. 	The Residence is still property of the estate
which 	only 	the 	chapter 	7 	trustee 	(the 	“Trustee”) 	can 	sell. 	See 	11
U.S.C. 	§ 	363(b)(1). 3 	Any 	value 	of 	the 	Residence 	in 	excess 	of 	the
Case: 05-44325 Doc# 42 Filed: 07/07/06 Entered: 07/07/06 14:31:55 Page 3 of 5

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U.S.C. § 554(a),(c),(d).
4
liens against the Residence, the Debtors’ exemption, and the costs of
sale 	belong 	to 	the 	bankruptcy 	estate. 	See 	In 	re 	Hyman, 	967 	F.2d
1316, 1321 (9 th Cir. 1992); In re Reed, 940 F.2d 1317, 1321, n.3 (9 th
Cir. 1991). 	The Trustee is advised to investigate whether he wishes
to adopt the Debtors’ proposed sale of the Residence for the benefit
of the estate.
END OF DOCUMENT
Case: 05-44325 Doc# 42 Filed: 07/07/06 Entered: 07/07/06 14:31:55 Page 4 of 5

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COURT SERVICE LIST
Edward O. Lee
152 Anza St., Ste. 101
Fremont, CA 94539
Spencer P. Scheer
Scheer & Imfeld, LLP
100 Smith Ranch Rd., Ste. 306
San Rafael, CA 94903
Paul Mansdorf
4071 San Pablo Dam Rd., #433
El Sobrante, CA 94803
Case: 05-44325 Doc# 42 Filed: 07/07/06 Entered: 07/07/06 14:31:55 Page 5 of 5