Burkholder v. AVCO Financial Services Consumer Discount (In Re Burkholder)

OPINION

THOMAS M. TWARDOWSKI, Bankruptcy Judge.

This case presents for decision 1 the issue of whether, pursuant to 11 U.S.C. § 522(f)(2) (1979), 2 debtors may avoid a non-possessory, nonpurchase-money security interest obtained prior to the effective date of the Bankruptcy Code. For reasons hereinafter given, we conclude debtors may avoid the lien of the security interest to the extent it impairs their exemptions.

Debtors filed a voluntary petition seeking relief under Chapter 7 of the Bankruptcy Code (11 U.S.C. §§ 101-1330; hereinafter, the Code) on February 14, 1980. In the accompanying…