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Can I lose my home?

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stephant77

Junior Member
What is the name of your state (only U.S. law)? New Jersey.
Hi there. My wife is facing a personal bankruptcy after defaulting on a New York taxi medallion loan (as you may know, the value of the medallions has plummeted post-Uber.) The bank is coming after her for the rest of the unpaid balance on the loan. I am not a party to the loan agreement; it's her company and I'm not involved.

My question is: Can the bank pursue the equity in our primary residence? I know some states protect the residence if the home was purchased as a couple and the other spouse is not party to the default.

Thanks! S.
 


adjusterjack

Senior Member
Can the bank pursue the equity in our primary residence? I know some states protect the residence if the home was purchased as a couple and the other spouse is not party to the default.
The bank can pursue your wife's 1/2 interest in the equity in your property. It would, of course, first have to sue and get a judgment.

However, keep in mind that NY has a homestead exemption from judgment in varying amounts depending on where you live in NYS.

Read about it in CVP 5206:

http://law.justia.com/codes/new-york/2015/cvp/article-52/5206/
 

stephant77

Junior Member
thanks but

we live in new jersey, not new york (though the medallions are for new york city). nj doesn't have a homestead exemption, but there is something called "tenancy," which apparently protects some part of our equity. i just can't find the details.
 

adjusterjack

Senior Member
Sorry, I saw the "New" on one line and had a brain fart.

You're right. NJ has no homestead exemption (bummer) but "survivorship interest of spouse in property held as tenancy by the entirety is exempt from creditors of the other spouse."

See the tenancy by entirety statute 46:3-17.2:

http://law.onecle.com/new-jersey/46-property/3-17.2.html

That's the NJ default if only your names appear on the deed, i.e John and Jane Doe, husband and wife. Check your deed. If any other type of ownership is specified then the specified type of ownership is applicable.

But that doesn't change the fact that "a debtor's interest in property held as tenant by the entirety may be reached by his or her creditors." Newman v. Chase, 359 A. 2d 474 - NJ: Supreme Court 1976.

http://scholar.google.com/scholar_case?case=11787407865913876640&q=tenancy+by+entirety&hl=en&as_sdt=4,31

Your half interest is protected.

But the answer to your question "Can I lose my home?" has to be yes to that possibility if you don't have the cash, or other assets to liquidate, to cover your wife's share of the equity that would have to be paid to the creditor before the rest of the debt can be discharged.

The creditor cannot execute against the house without a lawsuit but in bankruptcy the loan balance cannot be fully discharged if there are assets with which to pay part of it.
 
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