GERALD FINES, Chief Judge, Bankruptcy
This matter having come before the Court on a Motion to Modify the Automatic Stay filed by Dovenmuehle Mortgage, Objection to Dovenmuehle Motion to Modify Automatic Stay filed by the Debtor, Motion to Avoid Mortgage Lien filed by the Debtor, and Response to Motion to Avoid Mortgage Lien; the Court, having heard arguments of counsel and being otherwise fully advised in the premises, makes the following findings of fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure.
Findings of Fact
1. Debtor filed for relief under Chapter 7 of the Bankruptcy Code on February 26, 2004.
2. On Schedule D of his bankruptcy petition, the Debtor indicated that his real estate located at 2185 East County Road, 600 North, Oakland, Illinois, was encumbered by a first mortgage to Dovenmuehle Mortgage, Inc. in the approximate amount of $90,000, and by a second mortgage to Creditor, U.S. Bank, in the approximate amount of $40,000.
3. On May 20, 2004, Creditor, U.S. Bank, filed a Petition to Lift Stay requesting that the automatic stay be lifted so that U.S. Bank could enter its appearance and file a counter-claim in a mortgage foreclosure proceeding which had previously been filed by Dovenmuehle Mortgage, Inc.
4. On June 9, 2004, there being no objections filed, the Court entered an Order allowing the Petition to Lift Stay of Creditor, U.S. Bank.
5. On May 20, 2004, Creditor, Dovenmuehle Mortgage, Inc., filed its Motion to Modify the Automatic Stay indicating that arrearages were due on its mortgage and that the Debtor had no equity in the real estate such that the automatic stay should be lifted pursuant to the provisions of 11 U.S.C. § 362(d). On May 28, 2004, the Debtor filed an Objection to Dovenmuehle Motion to Modify Automatic Stay indicating as a basis for the objection that the mortgage was not timely filed with the Douglas County Recorder, and that, as such, the lien represented by the mortgage should be avoided pursuant to a Motion to Avoid Mortgage Lien also filed by the Debtor on May 28, 2004.
6. A hearing was held on July 20, 2004, at which time the Court heard arguments of counsel and took the matters before it under advisement.
Conclusions of Law
The issues raised in Debtor's Objection to Dovenmuehle Motion to Modify Automatic Stay and the Debtor's Motion to Avoid Mortgage Lien are identical. The Debtor asserts that the mortgage lien of Dovenmuehle Mortgage, Inc. should be avoided pursuant to the provisions of 11 U.S.C. §§ 522(h), 547(b), and 549(a) of the Bankruptcy Code. The Debtor asserts that, while a mortgage was signed and granted by the Debtor on January 24, 2003, the mortgage was not filed with the Douglas County Recorder until February 27, 2004, which was one day after the Debtor's Chapter 7 bankruptcy filing; and, as such, should be avoided in total.
First, the Court will address the Debtor's attempt to avoid the mortgage lien of Dovenmuehle Mortgage under the provisions of 11 U.S.C. § 522. As for Debtor's relief under § 522, the Court finds that § 522 is not applicable as to mortgage liens. Furthermore, the Court finds that, while the mortgage lien was not effective as to third parties until it was filed with the Douglas County Recorder on February 27, 2004, it was effective as a lien against the Debtor when the mortgage was signed and granted by the Debtor on January 24, 2003. See: 765 ILCS 5/2.
As for Debtor's allegation that the lien should be avoided pursuant to the provisions of 11 U.S.C. § 547 as a preference, the Court finds that a preference action would have to be filed as an adversary proceeding. But, even if the Debtor were to file an adversary proceeding, the Debtor would be unable to avoid the recording of Dovenmuehle's mortgage lien, in that the Debtor would lack standing under § 547, as that section is reserved to actions by the bankruptcy trustee.
Considering the Debtor's request to avoid the recording of the mortgage lien as a post-petition transfer under 11 U.S.C. § 549, the Court finds that action under that section would have to be filed as an adversary proceeding. However, even if the Debtor were to file an appropriate adversary, the Debtor would fail as, here again, the Debtor would lack standing, as actions under § 549 are reserved for the bankruptcy trustee.
Having found that the Debtor's Motion to Avoid Lien must fail, the Court finds that the Debtor's Objection to the Motion to Modify the Automatic Stay must also fail for the same reasons. A review of the Motion to Modify the Automatic Stay reveals that cause has been stated under the provisions of 11 U.S.C. § 362(d), and that, as such, the Motion to Modify the Automatic Stay filed by Creditor, Dovenmuehle Mortgage, Inc., on May 20, 2004, must be allowed.
ORDER
For the reasons set forth in an Opinion entered on the 9 day of August 2004;
IT IS HEREBY ORDERED that:
A. The Motion to Modify the Automatic Stay filed by Creditor, Dovenmuehle Mortgage, Inc., is ALLOWED; and,
B. The Motion to Avoid Mortgage Lien filed by Debtor, Rodney Wayne Bisby, is DENIED.