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power to avoid a judicial lien that impairs an exemption of the debtor even though the lien has already been satisfied and the bankruptcy case closed. Approximately two years after debtor's Chapter 7 discharge and the closure of debtor's case, debtor sought to refinance his house and discovered a pre-petition judicial lien. Debtor moved to reopen the case to avoid the lien, but before the motion was heard debtor consummated his refinancing and satisfied the lien. Although the bankruptcy court and bankruptcy appellate panel held that the matter was moot, the First Circuit held that a lien may be avoided under § 522(f) even though it has already been satisfied. The Court reached this conclusion based on the reference to "value" in § 522(f)(2)(a). Section 522(a) defines "value" with relation to the date of the filing of the petition. Accordingly, if the lien, valued as of the date of the petition, impaired debtor's exemption, the court may determine that the lien should be avoided, even if the lien was later satisfied.)
In re Ladd, 450 F.3d 751 (8th Cir. May 5, 2006) (Res judicata did not prohibit debtors from amending their schedules to claim state exemptions after their claimed federal exemptions were denied. The federal exemptions were denied by default when the Trustee objected and the debtor did not respond. When the debtors sought to amend their schedules to claim state exemptions, the Trustee objected asserting that res judicata precluded the amendment. The Court found that res judicata did not apply because of the significant differences between the homestead exemption under federal and state law. Under federal law, the question is whether the debtors' interest in the homestead is worth more than $34,850, but under Minnesota law the question is whether the homestead interest exceeds 160 acres or $500,000. There was no serious question that the debtors qualified for the state exemption.)
In re DeRoche, 434 F.3d 1188 (9th Cir. Jan. 17, 2006) (Arizona statute awarding attorneys fees to successful defendant in litigation brought by state government entity did not entitle debtor to attorneys fees after successfully defending discharge litigation against Arizona Industrial Commission pursuant to § 523(a)(1). State law did not govern the discharge proceedings, and the federal bankruptcy rule is that each party bears its own attorneys fees.)
Colsen v. United States (In re Colsen), 446 F.3d 836 (8th Cir. May 4, 2006) (Tax forms filed after IRS had prepared substitutes for missing returns, issued notices of deficiency and assessed taxes, interest and penalties constituted "returns," so debt to the IRS was dischargeable. One requirement of a "return" is that a document evince an honest and genuine endeavor to satisfy the law. This determination must be made form the face of the document, not from the circumstances under which the document was filed. The debtor's 1040 forms
