Justice Scalia
delivered the opinion of the Court.
The Bankruptcy Code allows the States to define what property a debtor may exempt from the bankruptcy estate that will be distributed among his creditors. 11 U. S. C. § 522(b). The Code also provides that judicial liens encumbering exempt property can be eliminated. § 522(f). The question in this case is whether that elimination can operate when the State has defined the exempt property in such a way as specifically to exclude property encumbered by judicial liens.
I
In 1975, Helen Owen, the respondent, obtained a judgment against petitioner Dwight Owen, her former husband, for approximately $160,000. The judgment was recorded in Sarasota County, Florida, in July 1976. Petitioner did not at that time own any property in Sarasota County, but under Florida law, the judgment would attach to any after-acquired property recorded in the county. B. A. Lott, Inc. v. Padgett, 153 Fla. 304, 14 So. 2d 667 (1943). In 1984, petitioner purchased a condominium in Sarasota County; upon acquisition of title, the property became subject to respondent’s judgment lien. Porter-Mallard Co. v. Dugger, 117 Fla. 137, 157 So. 429 (1934).
One year later, Florida amended its homestead law so that petitioner’s condominium, which previously had not qualified as a homestead, thereafter did. Under the Florida Constitution, homestead property is “exempt from forced sale . . . and no judgment, decree or execution [can] be a lien thereon . . . ,” Fla. Const., Art. 10, §4(a). The Florida courts have interpreted this provision, however, as being inapplicable to pre-existing liens, i. e., liens that attached before the property acquired its homestead status. Bessemer v. Gersten, 381 So. 2d 1344, 1347, n. 1 (Fla. 1980); Aetna Ins. Co. v. LaGasse, 223 So. 2d 727, 728 (Fla. 1969); Pasco v. Harley, 73 Fla. 819, 824-825, 75 So. 30, 32-33 (1917); Volpitta v. Fields, 369 So. 2d 367, 369 (Fla. App. 1979); Lyon v. Arnold, 46 F. 2d 451, 452 (CA5 1931). Pre-existing liens, then, are in effect an exception to the Florida homestead exemption.
In January 1986, petitioner filed for bankruptcy under Chapter 7 of the Code, and claimed a homestead exemption in his Sarasota condominium. The condominium, valued at approximately $135,000, was his primary asset; his liabilities included approximately $350,000 owed to respondent. The Bankruptcy Court discharged petitioner’s personal liability for these debts, and sustained, over respondent’s objections, his claimed exemption.
The condominium, however, remained subject to respondent’s pre-existing lien, and after discharge, petitioner moved to reopen his case to avoid the lien pursuant to § 522(f)(1). The Bankruptcy Court refused to decree the avoidance; the District Court affirmed, finding that the lien had attached before the property qualified for the exemption, and that Florida law therefore did not exempt the lien-eneumbered property. 86 B. R. 691 (MD Fla. 1988). The Court of Appeals for the Eleventh Circuit affirmed on the same ground. 877 F. 2d 44 (1989). We granted certiorari. 495 U. S. 929 (1990).
II
An estate in bankruptcy consists of all the interests in property, legal and equitable, possessed by the debtor at the time of filing, as well as those interests recovered or recoverable through transfer and lien avoidance provisions. An exemption is an interest withdrawn from the estate (and hence from the creditors) for the benefit of the debtor. Section 522 determines what property a debtor may exempt. Under § 522(b), he must select between a list of federal exemptions (set forth in § 522(d)) and the exemptions provided by his State, “unless the State law that is applicable to the debtor . . . specifically does not so authorize,” § 522(b)(1)— that is, unless the State “opts out” of the federal list. If a State opts out, then its debtors are limited to the exemptions provided by state law. Nothing in subsection (b) (or elsewhere in the Code) limits a State’s power to restrict the scope of its exemptions; indeed, it could theoretically accord no exemptions at all.
Property that is properly exempted under §522 is (with some exceptions) immunized against liability for prebank-ruptcy debts. § 522(c). No property can be exempted (and thereby immunized), however, unless it first falls within the bankruptcy estate. Section 522(b) provides that the debtor may exempt certain property “from property of the estate”; obviously, then, an interest that is not possessed by the estate cannot be exempted. Thus, if a debtor holds only bare legal title to his house—if, for example, the house is subject to a purchase-money mortgage for its full value — then only that legal interest passes to the estate; the equitable interest remains with the mortgage holder, § 541(d). And since the equitable interest does not pass to the estate, neither can it pass to the debtor as an exempt interest in property. Legal title will pass, and can be the subject of an exemption; but the property will remain subject to the lien interest of the mortgage holder. This was the rule of Long v. Bullard, 117 U. S. 617 (1886), codified in § 522. Only where the Code empowers the court to avoid liens or transfers can an interest originally not within the estate be passed to the estate, and subsequently (through the claim of an exemption) to the debtor.
It is such an avoidance provision that is at issue here, to which we now turn. Section 522(f) reads as follows:
“(f) Notwithstanding any waiver of exemptions, the debtor 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 —
“(1) a judicial lien; or
“(2) a nonpossessory, nonpurchase-money security interest . . . .”
The lien in the present case is a judicial lien, and we assume without deciding that it fixed “on an interest of the debtor in property.” See Farrey v. Sanderfoot, ante, p. 291. The question presented by this case is whether it “impairs an exemption to which [petitioner] would have been entitled under subsection (b).” Since Florida has chosen to opt out of the listed federal exemptions, see Fla. Stat. §222.20 (1989), the only subsection (b) exemption at issue is the Florida homestead exemption described above. Respondent suggests that, to resolve this case, we need only ask whether the judicial lien impairs that exemption. It obviously does not, since the Florida homestead exemption is not assertable against pre-existing judicial liens. To permit avoidance of the lien, respondent urges, would not presene the exemption but would expand it.
At first blush, this seems entirely reasonable. Several Courts of Appeals in addition to the Eleventh Circuit here have reached this result with respect to built-in limitations on state exemptions, though others have rejected it. What must give us pause, however, is that this result has been widely and uniformly rejected with respect to built-in limitations on the federal exemptions. Most of the federally listed exemptions (set forth in § 522(d)) are explicitly restricted to the “debtor’s aggregate interest” or the “debtor’s interest” up to a maximum amount. See §§ 522(d)(1)—(6), (8). If respondent’s approach to § 522(f) were applied, all of these exemptions (and perhaps others as well) would be limited by unavoided encumbering liens, see § 522(c). The federal homestead exemption, for example, allows the debtor to exempt from the property of the estate “[t]he debtor’s aggregate interest, not to exceed $7,500 in value, in ... a residence.” § 522(d)(1). If respondent’s interpretation of § 522(f) were applied to this exemption, a debtor who owned a house worth $10,000 that was subject to a judicial lien for $9,000 would not be entitled to the full homestead exemption of $7,500. The judicial lien would not be avoidable under § 522(f), since it does not “impair” the exemption, which is limited to the debtor’s “aggregate interest” of $1,000. The uniform practice of bankruptcy courts, however, is to the contrary. To determine the application of § 522(f) they ask not whether the lien impairs an exemption to which the debtor is in fact entitled, but whether it impairs an exemption to which he would have been entitled but for the lien itself.
As the preceding italicized words suggest, this reading is more consonant with the text of § 522(f)—which establishes as the baseline, against which impairment is to be measured, not an exemption to which the debtor “is entitled,” but one to which he “would have been entitled.” The latter phrase denotes a state of affairs that is conceived or hypothetical, rather than actual, and requires the reader to disregard some element of reality. “Would have been” but for what? The answer given, with respect to the federal exemptions, has been but for the lien at issue, and that seems to us correct. The only other conceivable possibility is but for a waiver— harking back to the beginning phrase of § 522(f), “Notwithstanding any waiver of exemptions . . . .” The use of contrary-to-fact construction after a “notwithstanding” phrase is not, however, common usage, if even permissible. Moreover, though one might employ it when the “notwithstanding” phrase is the main point of the provision in question (“Notwithstanding any waiver, a debtor shall retain those exemptions to which he would have been entitled under subsection (b)”), it would be most strange to employ it where the “notwithstanding” phrase, as here, is a,n aside. The point of § 522(f) is not to exclude waivers (though that is done in passing, waivers are addressed directly in § 522(e)) but to provide that the debtor may avoid the fixing of a lien. In that context, for every instance in which “would have been entitled” may be accurate (because the incidentally mentioned waiver occurred) there will be thousands of instances in which “is entitled” should have been used. It seems to us that “would have been entitled” must refer to the generality, if not indeed the universality, of cases covered by the provision; and on that premise the only conceivable fact we are invited to disregard is the existence of the lien.
This reading must also be accepted, at least with respect to the federal exemptions, if § 522(f) is not to become an irrelevancy with respect to the most venerable, most common, and most important exemptions. The federal exemptions for homesteads (§ 522(d)(1)), for motor vehicles (§ 522(d)(2)), for household goods and wearing apparel (§ 522(d)(3)), and for tools of the trade (§ 522(d)(6)), are all defined by reference to the debtor’s “interest” or “aggregate interest,” so that if respondent’s interpretation is accepted, no encumbrances of these could be avoided. Surely § 522(f) promises more than that — and surely it would be bizarre for the federal scheme to prevent the avoidance of liens on those items, but to permit it for the less crucial items (for example, an “unmatured life insurance contract owned by the debtor,” § 522(d)(7)) that are not described in such fashion as unquestionably to exclude liens.
We have no doubt, then, that the lower courts’ unanimously agreed-upon manner of applying § 522(f) to federal exemptions — ask first whether avoiding the lien would entitle the debtor to an exemption, and if it would, then avoid and recover the lien — is correct. The question then becomes whether a different interpretation should be adopted for state exemptions. We do not see how that could be possible. Nothing in the text of § 522(f) remotely justifies treating the two categories of exemptions differently. The provision refers to the impairment of “exemption[s] to which the debtor would have been entitled under subsection (b),” and that includes federal exemptions and state exemptions alike. Nor is there any overwhelmingly clear policy impelling us, if we possessed the power, to create a distinction that the words of the statute do not contain. Respondent asserts that it is inconsistent with the Bankruptcy Code’s “opt-out” policy, whereby the States may define their own exemptions, to refuse to take those exemptions with all their built-in limitations. That is plainly not true, however, since there is no doubt that a state exemption which purports to be available “unless waived” will be given full effect, even if it has been waived, for purposes of § 522(f)—the first phrase of which, as we have noted, recites that it applies “[notwithstanding any waiver of exemptions.” See Dominion Bank of Cumberlands, NA v. Nuckolls, 780 F. 2d 408, 412 (CA4 1985). Just as it is not inconsistent with the policy of permitting state-defined exemptions to have another policy disfavoring waiver of exemptions, whether federal- or state-created; so also it is not inconsistent to have a policy disfavoring the impingement of certain types of liens upon exemptions, whether federal- or state-created. We have no basis for pronouncing the opt-out policy absolute, but must apply it along with whatever other competing or limiting policies the statute contains.
On the basis of the analysis we have set forth above with respect to federal exemptions, and in light of the equivalency of treatment accorded to federal and state exemptions by § 522(f), we conclude that Florida’s exclusion of certain liens from the scope of its homestead protection does not achieve a similar exclusion from the Bankruptcy Code’s lien avoidance provision.
Ill
The foregoing conclusion does not necessarily resolve this case. Section 522(f) permits the avoidance of the “fixing of a lien on an interest of the debtor.” Some courts have held it inapplicable to a lien that was already attached to property when the debtor acquired it, since in such a case there never was a “fixing of a lien” on the debtor’s interest. See In re McCormick, 18 B. R. 911, 914 (Bkrtcy. Ct. WD Pa.), aff’d, 22 B. R. 997 (WD Pa. 1982); In re Scott, 12 B. R. 613, 615 (Bkrtcy. Ct. WD Okla. 1981). Under Florida law, the lien may have attached simultaneously with the acquisition of the property interest. If so, it could be argued that the lien did not fix “on an interest of the debtor.” See Farrey v. Sander-foot, ante, p. 291. The Court of Appeals did not pass on this issue, nor on the subsidiary question whether the Florida statute extending the homestead exemption was a taking, cf. United States v. Security Industrial Bank, 459 U. S. 70 (1982). We express no opinion on these points, and leave them to be considered by the Court of Appeals on remand.
The judgment of the Court of Appeals is reversed, and the case is remanded for proceedings consistent with this opinion.
It is so ordered.
See In re Pine, 717 F. 2d 281 (CA6 1983); In re McManus, 681 F. 2d 353 (CA5 1982).
See In re Brown, 734 F. 2d 119 (CA2 1984); Dominion Bank of Cumberland's, NA v. Nuckolls, 780 F. 2d 408 (CA4 1985); In re Thompson, 750 F. 2d 628 (CA8 1984); In re Leonard, 866 F. 2d 335 (CA10 1989).
Exemption (7) refers to a life insurance contract “owned” by the debtor, and exemptions (10) and (11) refer to various benefits, awards, and payments that the debtor has a “right to receive.” §§ 522(d)(7), (10), (11). Only exemption (9), § 522(d)(9), contains no language arguably excluding property subject to lien.
See, e. g., In re Simonson, 758 F. 2d 103, 105 (CA3 1985); In re Brantz, 106 B. R. 62, 68 (Bkrtey. Ct. ED Pa. 1989); In re Carney, 47 B. R. 296, 299 (Bkrtcy. Ct. Mass. 1985); In re Losieniecki, 17 B. R. 136, 138 (Bkrtcy. Ct. WD Pa. 1981). See also 3 Collier on Bankruptcy ¶ 522.29 (15th ed. 1990); B. Weintraub & A. Resnick, Bankruptcy Law Manual ¶4.08[2] (1986); Bowmar, Avoidance of Judicial Liens that Impair Exemptions in Bankruptcy: The Workings of 11 U. S. C. § 522(f)(1), 63 Am. Bankr. L. J. 375, 387-388, and n. 85 (1989) (hereinafter Bowmar). Some courts have held that § 522(f) allows the avoidance of liens even when, after the avoidance, there would be no debtor’s interest in the property to which a § 522(d) exemption could attach. See, e. g., In re Richardson, 55 B. R. 526 (Bkrtcy. Ct. ND Ohio 1985); In re Chesanow, 25 B. R. 228, 231 (Bkrtcy. Ct. Conn. 1982). But see, e. g., In re Hooper, 60 B. R. 640, 641 (Bkrtcy. Ct. WD Pa. 1986); In re Barone, 31 B. R. 540 (Bkrtcy. Ct. ED Pa. 1983). Today’s opinion does not speak to this issue. Finally, at least one court has suggested that equity excluding the liens is required for there to be an “interest” within the scope of § 522(f), In re Miller, 8 B. R. 43 (Bkrtcy. Ct. WD Mo. 1980), but that position has been rejected, In re Cole, 15 B. R. 322, 323, n. 1 (Bkrtcy. Ct. WD Mo. 1981).
For a more precise formulation, see In re Brantz, 106 B. R., at 68; In re Carney, 47 B. R., at 299; Bowmar 388-392.
In the dissent’s view, the question is whether the lien impairs an “exemption to which the debtor would have been entitled at the time the lien ‘fixed.’” Post, at 317. Under the Code, however, the question is whether the lien impairs an “exemption to which the debtor would have been entitled under subsection (b),” and under subsection (b), exempt property is determined “on the date of the filing of the petition,” not when the lien fixed. 11 U. S. C. §§ 522(f), (b)(2)(A). We follow the language of the Code.