Corydon E Moulton
This matter comes before the Court on Debtor’s Motion to Avoid Judicial Lien on Real Estate and to Avoid a Trustee Process Order (the Motion).1 In addition to the Motion, the Court has considered Debtor’s exhibits to the Motion,2 Debtor’s supplement,3 and Debtor’s testimony at a hearing on January 27, 2026.
For the reasons set forth below, the Court determines the judgment lien should be partially avoided, and the Trustee Process Order should be avoided in its entirety.
JURISDICTION
The Court has jurisdiction over this contested matter pursuant to
BACKGROUND
Debtor owns real property located in Morgan, Vermont (the Property), in which he claims a homestead exemption of $125,000.4 This matter arises out of state court litigation between Debtor and John
The Court notes this Judgment amount differs from the amount used by Movant.10 Movant’s calculations failed to account for accrual of interest between the Judgment date and the Petition Date. “In order to determine whether a lien impairs an exemption, the Bankruptcy Court must calculate the value of the lien.”11 The Court’s independent calculation of the lien amount revealed Debtor’s omission of the post-judgment, pre-petition interest.
In addition to the Judgment, John Deere obtained a summons for trustee process against Debtor’s checking account at Community Bank, N.A (the Trustee Process Order).12 Community Bank disclosed to the Superior Court that Debtor had $1,562.37 in the affected checking account.13 Community Bank continues to hold these funds pending further order of the Superior Court.14
The Motion followed, which asserts both the Judgment and the Trustee Process Order are avoidable in their entirety under
DISCUSSION
Debtor “may avoid the fixing of a lien on an interest of the debtor in property to the extent that such
A lien impairs an exemption to the extent the sum of—
- The lien;
- All other liens on the property; and
- The amount of the exemption that the debtor could claim if there were no liens on the property;
exceeds the value that the debtor’s interest in the property would have in the absence of any liens.17 First, the Court must determine whether John Deere’s claims constitute judicial liens, other than those specified under
I. The Judgment
a. Does the Judgment constitute a lien on the Property?
“A final judgment issued in a civil action…shall constitute a lien on any real property of a judgment debtor if recorded as provided in this chapter.”18 Recording a judgment lien involves “filing a copy of the judgment with date when it became final, certified by the clerk of the court issuing the judgment. The certification shall be recorded by the town clerk in the land records.19
The Judgment issued in a civil action.20 The Judgment became final on July 1, 2022.21 The Judgment was recorded in volume 96 of the land records by the Morgan Town Clerk’s Office on August 21, 2023.22 The Judgment therefore constitutes a judicial lien (the Judgment Lien). It is not excluded from the impairment analysis by
The Judgment Lien impairs Debtor’s exemption to the extent the sum of the Judgment Lien, all other liens on the property, and the amount of exemption Debtor could claim absent any liens exceeds the value of Debtor’s interest absent any liens. As calculated above, the value of the Judgment Lien is $16,739.58. The only other lien encumbering Debtor’s residence is a mortgage held by North Country FCU, with a balance of $44,968.77.23
In the Motion, Debtor calculated $125,000 as the amount of the homestead exemption he could claim absent any liens.24 Debtor claimed a homestead exemption on his signed Schedule C, which carries a maximum exemption of $125,000.25 After an evidentiary hearing on the Motion, Debtor filed a Supplement.26 In his Supplement, Debtor added a $4,465.00 wildcard exemption to this figure.27 To support this added exemption, Debtor attached an Amended Schedule C, showing an additional $4,265.00 exemption in the Property under
Without Debtor’s verification, this Amended Schedule C is not effective, and the Court cannot use it to determine whether the wildcard exemption is available. Therefore, Debtor could only claim $125,000 in exemptions absent any liens. The sum of the Judgment Lien, all other liens, and the maximum exemption allowable in the absence of liens is $186,708.35.30
The Judgment Lien impairs Debtor’s exemptions to the extent $186,708.35 exceeds the value of Debtor’s interest in the property absent any liens. Debtor owns the Property in fee simple,31 so an accurate value of the Property is integral to the impairment analysis.
The value of Debtor’s interest in the Property absent any liens remains unclear. The tax assessed value from the Town of Morgan is $197,800.32 Debtor argues the Town overvalues the Property, and the Property’s actual value is around $160,000.33 In support of his position, Debtor argues the property needs substantial repairs, yet fails to provide evidence of the amount of those repairs to support his claimed value.34 Given the material difference in these valuations, the Court set an evidentiary hearing to determine the value of the Property.35 Debtor provided the tax assessment, and testified as to the extent of repairs needed, but proffered no evidence of the cost estimates to address the repairs and how he derives a value of $160,000 for the Property as a whole. While Debtor’s testimony constitutes some evidence of value, absent a basis of how he arrived at the $160,000 purported value, the Court finds his testimony lacking. Tax assessors are required by state law to appraise properties at their fair market value.36 Debtor had a statutory right to contest the assessed value if he felt it was inaccurately high, which he failed to exercise.37
During the hearing, Debtor’s counsel argued the Common Level of Appraisal (CLA) supports Debtor’s argument that the assessed value by the Town of Morgan is higher than the fair market value of
The Court may take judicial notice of an adjudicative fact “that is not subject to reasonable dispute because it can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”40 This can be done sua sponte, and it can happen at any time.41
Courts may only take judicial notice of adjudicative facts, not legislative facts.42 Adjudicative facts are simply the facts of the particular case.43 “When [a court] finds facts concerning immediate parties – what the parties did, what the circumstances were, what the background conditions were – the [Court] is performing an adjudicative function, and the facts may conveniently be called adjudicative facts.”44 Legislative facts, on the other hand, are those which have relevance to legal reasoning and the lawmaking process, whether in the formulation of a legal principle or ruling by a judge or court or in the enactment of a legislative body.45 “When [a court] wrestles with a question of law or policy, it is acting legislatively, just
Courts “generally [have] the discretion to take judicial notice of internet material,” as the authenticity of websites is not subject to reasonable dispute.47 The Second Circuit has taken judicial notice of facts “from official government websites, including executive orders…as they are accessible on the State of New York’s website.”48 The Northern District of New York has taken judicial notice of facts derived from websites for New York’s economic development financing entities,49 as well as the website for the National Cancer Institute.50 The Western District of New York has taken judicial notice of facts derived from the U.S. Patent and Trademark Office’s website.51
The Court finds the CLA constitutes an adjudicative fact, since it relates to the circumstances and background conditions informing Debtor’s ability to avoid John Deere’s lien.52 It is also not subject to reasonable dispute. The Court was able to accurately and readily determine the CLA from the Vermont Department of Taxes,53 whose accuracy as to the proper formula for assessing property taxes cannot reasonably be questioned. Accordingly, the Court takes judicial notice that the CLA in Morgan, Vermont is 106.12%. Once applied to the assessment of Debtor’s homestead, the value of the Property is reduced to $186,392.76.
Based upon the record before the Court, the Court is persuaded the assessed value of the Property to be high and thus determines the assessed value should be reduced to reflect the CLA.
“A lien shall be considered to impair an exemption to the extent that the sum of the lien; all other liens on the property; and the amount of the exemption that the debtor could claim if there were no liens on the property exceeds the value that the debtor’s interest in the property would have in the absence of any liens.”54 The value of John Deere’s lien is $16,739.58. The only other lien on the property is a mortgage in the amount of $44,968.00. If there were no liens on the property, Debtor could claim a $125,000.00 homestead exemption.55 The Property is worth $186,392.76. Debtor has a fee simple interest in the Property, so his interest in the property absent any liens would be $186,392.76.56
Under
| The sum of the John Deere Lien, plus | $16,739.58, plus |
| The sum of all other liens on the property, plus | $44,968.00, plus |
| Amount of exemption Debtor could claim, equals | $125,000.00, equals |
| Subtotal, minus | $186,708.35, minus |
| Debtor’s interest in property absent liens, equals | $186,392.76, equals |
| The extent of impairment | $315.59 |
The John Deere lien impairs Debtor’s exemptions to the extent of $315.59. Therefore, “Debtor may avoid the fixing of [the] lien” to that extent.57 This leaves a balance of $16,423.99 remaining on the John Deere lien. John Deere shall retain this balance as a secured claim against the Property.
II. The Trustee Process Order
The Bankruptcy Code defines a “lien” as an “interest in property to secure payment of a debt or
John Deere obtained the Trustee Process Order to collect on its judgment against Debtor in the Superior Court. The Trustee Process Order grants John Deere an interest in Debtor’s checking account deposits to secure payment of the judgment. This interest was obtained by a thorough legal process in the Superior Court, which began with a judgment issued against Debtor, and culminated in a series of post-Judgment Trustee Process Hearings before that court.
The Trustee Process Order is therefore a judicial lien as defined by
The Trustee Process Order impairs Debtor’s exemption to the extent the sum of the Trustee Process Order, all other liens on the property, and the amount of exemption Debtor could claim absent any liens exceeds the value of Debtor’s interest absent any liens. The value of the Trustee Process Order is the balance of Debtor’s personal checking account with Community Bank, N.A.: $1,562.37. There are no other liens encumbering the checking account. In the absence of any liens, Debtor could claim the entire account balance as exempt.62 The sum of the Trustee Process Order, all other liens, and the maximum exemption allowable in the absence of liens is $3,124.74.63 The Trustee Process Order impairs Debtor’s exemption to
Under
| The sum of the Trustee Process Order, plus | $1,562.37, plus |
| The sum of all other liens on the property, plus | $0.00, plus |
| Amount of exemption Debtor could claim, equals | $1,562.37, equals |
| Subtotal, minus | $3,124.74, minus |
| Debtor’s interest in property absent liens, equals | $1,562.37, equals |
| The extent of impairment | $1,562.37 |
The Trustee Process Order impairs Debtor’s exemptions to the extent of $1,562.37. Therefore, “Debtor may avoid the fixing of [the] lien” to that extent.64 This is the entire balance of the lien, so the Trustee Process Order is avoided in its entirety.
CONCLUSION
For the reasons set forth above, the Motion to Avoid Lien is GRANTED IN PART and DENIED IN PART. Debtor may avoid the fixing of the Judgment lien to the extent of $315.59, leaving a balance on that lien of $16,423.99, which John Deere shall retain as a secured claim. The Trustee Process Order is avoided in its entirety. This memorandum of decision constitutes the Court’s findings of fact and conclusions of law.
February 6, 2026
Burlington, Vermont
Heather Z. Cooper
United States Bankruptcy Judge