United States Bankruptcy Appellate Panel of the Eighth Circuit
In re Mirella S. GOBEN, Debtor.
Corydon State Bank, Objector-Appellee. Mirella S. Goben, Debtor-Appellant
Submitted: Aug. 20, 2013.
Before KRESSEL, SCHERMER and NAIL, Bankruptcy Judges.
SCHERMER, Bankruptcy Judge.
Mirella S. Goben (the " Debtor" ) appeals from the bankruptcy court's  order sustaining Corydon State Bank's (the " Bank" ) objection to the Debtor's claimed exemption in a vehicle, and ruling that the Debtor cannot avoid the Bank's lien under § 522(f) of Title 11 of the United States Code (the " Bankruptcy Code" ). We have jurisdiction over this appeal from the final order of the bankruptcy court. See 28 U.S.C. § 158(b). For the reasons set forth below, we affirm.
The first issue in this case is whether the bankruptcy court properly concluded that the Debtor had no interest in a vehicle in which she could claim an exemption where the vehicle was fully encumbered. We agree with the bankruptcy court's decision that the Debtor could not claim an exemption in the Vehicle. The second issue is whether Bankruptcy Code § 522(f) allows the Debtor to avoid the Bank's lien. We also agree with the bankruptcy court's ruling that the Bankruptcy Code provides for no such avoidance.
On January 2, 2013, the Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. On her Schedule C (claimed exemptions), the Debtor claimed a $1,000 exemption in her 2000 Hyundai Tiburon (the " Vehicle" ) under Iowa law. The Debtor listed the value of this vehicle as $1,000 on her Schedule C.
The Bank objected to the Debtor's claimed exemption in the Vehicle, stating that it made loans to the Debtor, and claiming a perfected security interest in the Vehicle. The Debtor filed an Objection to Bank's Objection to Exemption (the " Debtor's Objection" ). After a hearing, the bankruptcy court held that it was " unclear whether the Bank holds a perfected lien against [the Vehicle]." The court then ordered the Bank to provide documents to show that it had a perfected lien against the Vehicle. The court stated that after receipt of the requested documents, the court would make a decision without a further hearing. 
In May 2013, the bankruptcy court entered an order on its docket finding that the Debtor had listed the Vehicle on her Schedule C with a value of $1,000, and as exempt (under IOWA CODE § 627.6) in the amount of $1,000. The court stated that the Bank objected to the claimed exemption " based upon two loans with an outstanding balance of $4,233.39," that the loans were secured by the Vehicle and that the Bank's lien was noted on the Vehicle's Certificate of Title. The court concluded that the debt secured by the Vehicle exceeded the value of the Vehicle and, therefore, " the Debtor has no interest in the motor [V]ehicle to claim as exempt." The bankruptcy court also stated that § 522(f) of the Bankruptcy Code " is not available to the Debtor to avoid this type of lien." Therefore, the bankruptcy court sustained the Bank's objection to the Debtor's exemption and overruled the Debtor's Objection. 
STANDARD OF REVIEW
The bankruptcy court's findings of fact are reviewed for clear error, and it conclusions of law are reviewed de novo. Abdul-Rahim v. LaBarge (In re Abdul-Rahim ), 720 ...