Falck v. Household Finance Corporation

The Plaintiff filed bankruptcy and was allowed to remove a chattel mortgage from his household goods.

The defendant Household Finance Corporation held a security interest in certain items of personal property, and wanted permission from the court to repossess the items.

The court held that the valid security interest in favor of Household Finance Corporation was a non posessory, non purchase lien that imapired a bankruptcy exemption that the plaintiff was entitled to have, and the court held that the lien was avoided in its entirety; repossession was DENIED, pursuant to Bankruptcy Code §522(f).

This was an important precident within the U.S. Bankruptcy Court for the Central District of California because it tested the boundries of lien avoidance under what was then a new bankruptcy law.