Case Summary:
Debtors/farmers filed motion to avoid the lien of Farm Service Agency in “tools of the trade.”  The equipment in question had been claimed as exempt property under the Wisconsin exemption statutes, Wis. Stat. § 815.18(3)(b).  FSA objected to the motion, contending that 11 U.S.C. § 522(f)(3) created a federally mandated “cap” on lien avoidance on tools of the trade.  According to FSA, the debtors should only be entitled to lien avoid $5,000.00 each of its lien, rather than the $7,500.00 allowed by the state exemption.

Court held that § 522(f)(3) did not apply in Wisconsin because Wisconsin did not allow unlimited exemptions in tools of the trade and also did not expressly prohibit lien avoidance.  Declined to follow In re Parrish, 186 B.R. 246 (Bankr. W.D. Wis. 1995), and adopted the reasoning of the court in In re Zimmel, 185 B.R. 786 (Bankr. D. Minn. 1995).

Statue/Rule References:
11 U.S.C. § 522(f) -- Lien Avoidance

Key Terms:
Exemptions
Lien Avoidance