MEMORANDUM OF DECISION
Three Chapter 7 cases are now before the court on the debtors’ motions to avoid liens on wages deducted pursuant to an Illinois collection law. The motions are all grounded *562 in § 522(f) of the Bankruptcy Code (Title 11, U.S.C.). Because of a recent change in Illinois law regarding the exemptibility of such wages, the court questioned whether § 522(f) remained applicable, and provided the debtors an opportunity to brief the question. Having considered the briefs submitted by the debtors, the court concludes that, given the change in Illinois law, relief under § 522(f) is no longer available in the situation presented here.
Jurisdiction
The pending motions are specifically authorized by § 522(f) of the Bankruptcy Code, and are therefore proceedings “arising under title 11,” as set forth in 28 U.S.C. § 1334(b). The district court has jurisdiction over such proceedings, and may refer them to bankruptcy judges, pursuant to 28 U.S.C. § 157(a). By General Rule 2.33(a), the District Court for the Northern District of Illinois has made such a reference. Bankruptcy judges have authority to enter appropriate orders in “core proceedings” arising in bankruptcy cases. 28 U.S.C. § 157(b)(1). The pending motions are core proceedings. 28 U.S.C. § 157(b)(2)(E).
Findings of Fact
In all three cases now before the court, the asserted facts are uneontested and essentially the same. The creditors in each case obtained judgments against the debtors prior to the filing of the bankruptcy cases. The creditors then attempted to collect on their judgments by instituting wage deduction proceedings under Illinois law, causing wage deduction summonses to be served on the debtors’ employers. These summonses required the employers to withhold a portion of the debtors’ wages. In each case, the debtors filed petitions under Chapter 7 of the Bankruptcy Code before the return date of the wage deduction summonses, and the debtors’ employers are still holding the wages that they deducted pursuant to the summonses. During their Chapter 7 cases, the debtors brought motions to avoid the lien on these wages created by the wage deduction proceedings.
Conclusions of Law
The treatment of uneontested motions. None of the motions now before the court drew any response from the affected creditors, perhaps because the creditors believed that the amounts at issue were insufficient to merit the cost of a court appearance. In any event, the motions are uneontested, and the first issue before the court is the standard for granting an uneontested motion.
Although few reported decisions have addressed this issue, the relevant authorities indicate (1) that a bankruptcy court may review the merits of an uneontested motion prior to granting relief, and (2) that the motion should be denied if there are not good grounds for the relief sought. One decision, dealing with a motion to avoid lien, states this rule directly: “The granting of an uneontested motion is not an empty exercise but requires that the court find merit to the motion.”
Nunez v. Nunez (In re Nunez),
Critical review of uneontested motions, moreover, is consistent with a basic legal principle — that courts are not required to grant a request for relief simply because the request is unopposed. Other applications of this principle, in the bankruptcy context, include the rule that bankruptcy courts should review uneontested fee applications, that bankruptcy courts may deny default judgments against nonappearing defendants, and that appellate tribunals may deny bankruptcy appeals even though no appellee participates.
In re Busy Beaver Building Centers, Inc.,
Accordingly, this court has decided to review the pending uncontested motions to determine whether they set forth good grounds for the relief sought.
The requirements for lien avoidance under § 522(f)(1)(A). Each of the motions now before the court seeks avoidance of a lien under § 522(f)(1)(A) of the Bankruptcy Code. Section 522(f)(1)(A) permits the debtor to avoid a lien if four requirements are satisfied:
(1) the lien the debtor seeks to avoid is a judicial hen; (2) the debtor claims an exemption in the property to which the debt- or is entitled under § 522(b); (3) the creditor’s hen impairs the debtor’s exemption; and (4) the debtor has an interest in the property.
Johnson v. Ford Motor Credit Co. (In re Johnson),
There is no question that the first and fourth of these requirements are met by the pending motions. The Illinois wage deduction process plainly imposes a “judicial hen” on wages of the debtor. That process begins with a judgment creditor filing with the clerk of the court (1) an affidavit indicating that an employer currently owes or will owe wages to the debtor, and (2) a set of written interrogatories to be answered by the employer. 735 ILCS 5/12-805. In turn, the clerk of the court issues a summons commanding the employer to appear in court to answer the interrogatories.
Id.
The judgment creditor then causes the summons, judgment, interrogatories, and a wage deduction notice to be served on the employer. 735 ILCS 5/12-806. Service of these documents both requires the employer to begin deducting a portion of the debtor’s wages and creates a lien on the deducted wages in favor of the judgment creditor. 735 ILCS 5/12-808(b). This hen is precisely the sort defined by § 101(36) of the Bankruptcy Code as a “judicial lien”—a “lien obtained by judgment, levy, sequestration, or other legal or equitable process or proceeding.”
In re Johnson,
Similarly, the debtors in these cases plainly retained an interest in their wages as of the time of the bankruptcy filings. Had the bankruptcies not intervened, imposing an automatic stay on the wage deduction proceedings, there would have been the opportunity for a hearing in state court, after which that court would have issued an order determining the rights of parties claiming an interest in the wages deducted by the employer. 735 ILCS 5/12-811, 812;
see In re Bates,
Rather, the question raised by the pending motions is as to the third requirement for lien avoidance under § 522(f)(1)(A)—whether the debtor is entitled to claim the property exempt under § 522(b). Because, as discussed below, the debtors here are not entitled to claim such an exemption, it is unnecessary to consider whether the creditors’ lien would impair the exemption, the final requirement for hen avoidance under § 522(f)(1)(A).
Exemption under § 522(b).
Section 522(f)(1) of the Bankruptcy Code allows a debtor to avoid a lien only “to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section____” 11 U.S.C. § 522(f)(1) (1994). Would the debtors have been entitled to claim them deducted wages exempt under § 522(b)? That question ultimately turns on the application of Illinois law, because, as allowed by § 522(b), the State of Illinois has chosen to require debtors in this state to employ the exemptions provided by Illinois law.
In re Sullivan,
The law on which the debtors make their claim of an exemption is Part 10 of Article XII of the Illinois Code of Civil Procedure. 735 ILCS 5/12-1001 et seq. (the “Illinois personal property exemption law”). Section 12-1001(b) of that law establishes the wildcard exemption, granting to each debtor the right to exempt “[t]he debtor’s equity interest, not to exceed $2,000 in value, in any other [personal] property.” However, the debtors’ claim of wildcard exemptions is called into question by the final sentence of § 12-1001. As modified by Article 10 of P.A. 89-686, which became effective December 31, 1996, this sentence prohibits the application of any Illinois personal property exemption to “any wages due or to become due to the debtor that are required to be withheld in a wage deduction proceeding under [the Illinois wage deduction law].” 735 ILCS 5/12— 1001.
Two of the debtors whose motions are now before the court, Julius Franklin and Pamela Brown, argue — based on legislative history— that the new exemption limitation should be read to affect only wage deduction proceedings themselves, and not lien avoidance in bankruptcy. This distinction is not possible. Legislation in Illinois is subject to the usual rule that unambiguous statutory language must be given effect.
In re Barker,
Exemption under § 522(1).
Although the debtors may not exempt their deducted wages under § 522(b), the wages deducted in these cases have nevertheless been exempted, pursuant to §
522(1).
That subsection requires a debtor to file a list of property claimed as exempt and provides that “[unless a party in interest objects, the property claimed as exempt on such list is exempt.” 11 U.S.C. §
522(l)
(1994). Fed.R.Bankr.P. 4003(b) gives parties in interest 30 days from the conclusion of the § 341 meeting to file objections to a claim of exemption. In the present cases, this date has passed, and no party has filed any objection to exemptions. Accordingly, the deducted wages, claimed as exempt by the debtors, are exempted by default.
Taylor v. Freeland & Kronz,
This argument, however, ignores the actual requirement of § 522(f)(1)(A). As noted above, that provision allows lien avoidance not to the extent that any exemption would be impaired, but only “an exemption to which the debtor would have been entitled under subsection (b).” 11 U.S.C. § 522(f)(1) (1994). Thus, whether an exemption arises by default under § 522(Z) is not dispositive; the debtor must show a substantive entitlement to exemption under § 522(b). As the *565 Taylor decision emphasized, a debtor may acquire an exemption by default under § 522(i) even though the debtor emphatically would not have been entitled to the exemption under § 522(b). The requirement of § 522(f)(1)(A) is thus not simply that the property be exempt, but that it be substantively exemptible.
A majority of the decisions considering the issue have held that § 522(f)(1)(A) does require substantive exemptibility.
Morgan v. FDIC (In re Morgan),
Moreover, this interpretation would be required, even if § 522(f)(1) were ambiguous, in order to avoid serious constitutional questions.
See International Assn. of Machinists v. Street,
A number of decisions have recognized this due process concern. “Allowing the debtor to rely upon the exemption-by-default of § 522(Z) to avoid a secured creditor’s lien would amount to a procedural ambush not sanctioned by the Constitution.”
Morgan,
Additional due process concerns were expressed in
In re Maylin,
All of these due process questions are eliminated by interpreting § 522(f)(1)(A), according to its terms, to require substantive exemptibility, thus allowing creditors to raise objections to exemptibility at the hearing on lien avoidance.
There are decisions apparently holding that liens should be avoided under § 522(f) as to any property exempted by default under §
522(l).
These decisions generally hold that creditors are precluded from objecting to the debtor’s claimed exemptions in a § 522(f) proceeding if they did not raise the objection within the time limit established by Rule 4003, as interpreted by the Supreme Court in
Taylor. See Caruthers v. Fleet Finance, Inc. (In re Caruthers),
[Creditor] may not at this stage challenge the status of [debtor’s] property as exempt pursuant to Rule 4003(b), which allows ... 30 days from the conclusion of the creditors’ meeting in which to object to the exemption. Strict adherence to that deadline is mandated both by the literal language of Section 522(Z) ... and by the definitive construction of that language in Taylor____
The difficulty with all of these decisions— apart from the issues of statutory construction and due process noted above — is that they fail to recognize the distinction between exemption and lien avoidance. Exemption only has the effect of removing property from the debtor’s estate. Thus, property that is exempt will not be administered for the benefit of creditors.
See Marine Midland Bank v. Scarpino,
Conclusion
For the reasons stated above, this court holds that Illinois debtors cannot avoid the judgment creditors’ liens in deducted wages under § 522(f)(1)(A). Separate orders will therefore be entered denying the pending motions.