Adam Wade Campbell

IN THE UNITED STATES BANKRUPTCY COURT FOR THE
EASTERN DISTRICT OF TENNESSEE
In re
Case No. 3:25-bk-32010-SHB
ADAM WADE CAMPELL 	Chapter 7
Debtor
MEMORANDUM AND ORDER ON
AMENDED MOTIONS TO AVOID LIENS PURSUANT TO 11 U.S.C. § 522(f)(1)(A)
Before the Court are two Amended Motions to Avoid Judicial Liens (collectively,
“Amended Motions”) filed by Debtor on May 4, 2026, which seek, pursuant to 11 U.S.C. §
522(f)(1)(A), to avoid the judicial liens of ABC Supply Co. Inc. and Builders FirstSource, Inc.,
respectively, on real property located at 1907 Ivydale Road, LaFollette, Tennessee
(“Residence”). [Docs. 47, 48.] Specifically, Debtor argues that both judicial liens impair the
$35,000.00 homestead exemption provided by Tennessee Code Annotated section 26-2-301.1
Builders FirstSource, Inc. filed its objection on April 2, 2026, based on the valuation of the real
property at $70,900.00. [Doc. 39.] A hearing was held on May 7, 2026. This memorandum and
order memorializes the Court’s ruling at that hearing.
1 Debtor filed a Notice of Filing on May 4, 2026 [Doc. 51], in support of the Amended Motions.
SO ORDERED.
SIGNED this 11th day of May, 2026
THIS ORDER HAS BEEN ENTERED ON THE DOCKET.
PLEASE SEE DOCKET FOR ENTRY DATE.
_____________________________________________________________
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All legal and equitable interests of a debtor in property become property of the
bankruptcy estate at the commencement of a case. 11 U.S.C. § 541(a)(1). Certain property,
however, may be exempt from the estate pursuant to 11 U.S.C. § 522(b). See also Tenn. Code
Ann. § 26-2-112 (requiring debtors residing in Tennessee to use the state statutory exemptions).
To properly claim exemptions, debtors must list the property and the appropriate statutory
authority in Schedule C. See Fed. R. Bankr. P. 4003(a). Any party in interest objecting to a
claimed exemption must prove that the debtor is not entitled to the exemption by a
preponderance of the evidence. In re Arwood, 289 B.R. 889, 893 (Bankr. E.D. Tenn. 2003)
(citing Fed. R. Bankr. P. 4003(c)).
Debtors also may “avoid the fixing of a lien on an interest of the debtor in property to the
extent that such lien impairs an exemption to which the debtor would have been entitled under
subsection (b) of this section, if such lien is – (A) a judicial lien.” 11 U.S.C. § 522(f)(1)(A); see
also Fed. R. Bankr. P. 4003(d)(1). To successfully avoid such a lien, a debtor must establish that
the lien is a judicial lien; that the lien attaches to a pre-existing property interest of debtor’s; and
that the lien impairs an exemption to which debtor would otherwise be entitled.” See In Snyder,
645 B.R. 595, 601 (Bankr. N.D. Ohio 2022) (citations omitted).
Debtor claimed a $35,000.00 homestead exemption on his Schedule C filed on October
27, 2025 [Doc. 1 at 25], pursuant to the following Tennessee statutory authority:
An individual, whether a head of family or not, shall be entitled to a homestead
exemption upon real property which is owned by the individual and used by the
individual or the individual's spouse or dependent, as a principal place of residence.
The aggregate value of such homestead exemption shall not exceed thirty-five
thousand dollars ($35,000); provided, individuals who jointly own and use real
property as their principal place of residence shall be entitled to homestead
exemptions, the aggregate value of which exemptions combined shall not exceed
fifty-two thousand five hundred dollars ($52,500), which shall be divided equally
among them in the event the homestead exemptions are claimed in the same
proceeding; provided, if only one (1) of the joint owners of real property used as
their principal place of residence is involved in the proceeding wherein homestead
exemption is claimed, then the individual’s homestead exemption shall be thirty-
five thousand dollars ($35,000). The homestead exemption shall not be subject to
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execution, attachment, or sale under legal proceedings during the life of the
individual. Upon the death of an individual who is head of a family, any such
exemption shall inure to the benefit of the surviving spouse and their minor child
or child who is eighteen (18) years of age or older and has a developmental
disability or intellectual disability for as long as the spouse, minor child, or child
who is eighteen (18) years of age or older and has a developmental disability or
intellectual disability uses such property as a principal place of residence.
Tenn. Code Ann. § 26-2-301(a).
Ann Mostoller, Chapter 7 Trustee, filed an objection to the exemption on January 28,
2026 [Doc. 27], but later filed a withdrawal of that objection on March 13, 2026 [Doc. 32].
Debtor argues that because the Trustee withdrew her objection, the exemption has been allowed.
Notwithstanding Debtor’s argument, however, allowance and entitlement are two different
concepts, and Debtor is not entitled to claim the homestead exemption under Sixth Circuit
authority interpreting Tennessee law because the homestead exemption does not apply to
Debtor’s right of survivorship in a tenancy by the entireties.
Debtor does not dispute that he is married and owns the Residence jointly with his wife
as tenants by the entireties, through which both spouses are “seized of the whole or the entirety .
. . , and ownership of the property, as a whole, fully vests in the surviving spouse upon the death
of the other spouse.” In re Arwood, 289 B.R. at 893 (citation omitted). Instead, he argues, in
essence, that In re Arwood was incorrectly decided and that a married debtor who files an
individual case is nevertheless entitled to claim a homestead exemption to avoid a judicial lien
under § 522(f). The Court, however, disagrees.
As stated in In re Arwood, an individual debtor “does not have a vested homestead
exemption in his survivorship interest” in a residence owned jointly with a non-filing spouse as
tenants-by-the-entireties, id. at 897, and “[t]he bankruptcy courts in Tennessee have consistently
held that a debtor has no homestead exemption in the right of survivorship.” Id. at 895 (citation
modified). The decision in In re Arwood is based significantly on Arango v. Third Nat’l Bank
(In re Arango), 992 F.2d 611, 615 (6th Cir. 1993), in which the Sixth Circuit examined this exact
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issue: whether a debtor was authorized to claim the homestead exemption in property owned
jointly with his spouse as tenants-by-the entireties when only he had filed a bankruptcy case.
After analyzing Tennessee law and the nature of ownership by spouses, the court determined the
following:
Third National’s lien does not impair an exemption to which Arango would be
entitled but for the existence of the lien. Third National’s lien encumbers Arango’s
right of survivorship, which Arango concedes is part of his bankruptcy estate. Third
National’s lien, however, does not encumber Arango’s present possessory interest
in his entireties property under Tennessee law because Tennessee does not consider
entireties property to be the property of each individual spouse. Third National is
not able under Tennessee law to foreclose on its lien against Arango’s present
ability to use and enjoy the entireties property. Therefore, Arango’s present
possessory interest in the entireties property is not impaired, for purposes of section
522(f), by Third National’s lien.
Id. at 615. The holding in Arango remains the law of this Circuit. See, e.g., Blachy v. Butcher,
221 F.3d 896, 907 (6th Cir. 2000) (“By recognizing an interest in entireties property that is part
of a debtor's bankruptcy estate, In re Arango implicitly recognized the corresponding interest
that would not be part of the debtor's estate.”); Teems v. Thomas (In re Thomas), No. 17-25100-
L, Adv. No. 18-00015, 2018 WL 10731606, at *6 (Bankr. W.D. Tenn. Sept. 27, 2018) (“[T]he
trustee in bankruptcy may sell the debtor's right of survivorship subject to the homestead
exemption. If and when the debtor is the survivor, he would be entitled to receive the value of the
exemption from the purchaser. He is not, however, entitled to the value of the homestead
exemption from the proceeds of sale.”) (citation omitted)).2
To the extent that Debtor argues that his assertion of a homestead exemption is
unassailable under Rule 4003(b), the Court disagrees. Under Tennessee law, the statutory
homestead exemption does not apply to a spouse’s right to survivorship in property held as
2 Debtor urges the Court to apply the holding of Brinley v. LPP Mortgage, Ltd. (In re Brinley), 403 F.3d 415 (6th Cir.
2005), in which the Sixth Circuit acknowledged that a judicial lien impaired a residence owned by the parties as
tenants-by-the-entireties. This Court does not agree that In re Brinley, which was decided under Kentucky law and
does not discuss the issue of entitlement to a homestead exemption, is inapplicable. However, under In re Brinley,
Debtor would be required to calculate the § 522(f) formula using the full value of the Residence, which would mean
that the liens would not impair the exemption. See id. at 420.
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tenants by the entireties. The property to which the homestead does apply is not property of this
bankruptcy estate. Only the right of survivorship – and not the homestead itself – is property of
the bankruptcy estate. See Arango, 992 F.2d at 614 (“Therefore, incorporating Tennessee law
into 11 U.S.C. § 522(b)([3])(B), as required by that subsection, [the debtor’s] bankruptcy estate
does not include his present possessory interest in property he holds as a tenant by the entirety,
but his bankruptcy estate does include his right of survivorship in that property.”) Debtor’s
Schedules A/B and C identify the Residence with a value of $70,900.00 – not the right of
survivorship. Claiming the homestead exemption in the Residence is simply ineffective to claim
an exemption in the right of survivorship, for which there is no exemption under Tennessee law.
See id. at 615-16 (stating that the “lien encumbers [the debtor’s] right of survivorship, which [the
debtor] concedes is part of his bankruptcy estate” and ruling that because the judgment “lien
does not impair, for purposes of 11 U.S.C. § 522(f)(1), any of [the debtor’s] exemptions,” the
lien could not be avoided).
Because only Debtor’s survivorship interest in the Residence is property of the estate, and
the homestead exemption does not apply to that survivorship interest under Sixth Circuit and
Tennessee law, the Court, accordingly, directs the following:
1. The Amended Motion to Avoid Judicial Lien Pursuant to 11 U.S.C. § 522(f)(1)(A)
filed by Debtor on May 4, 2026 [Doc. 47], seeking to avoid the lien of ABC Supply Co. Inc. is
DENIED.
2. The Amended Motion to Avoid Judicial Lien Pursuant to 11 U.S.C. § 522(f)(1)(A)
filed by Debtor on May 4, 2026 [Doc. 48], seeking to avoid the lien of Builders FirstSource, Inc.
is DENIED.
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