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Tenants by the Entirety

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thermal

Junior Member
Hello
I am from Quincy, FL. I am at default in paying my credit card debt and I have no way of paying it. My creditor is now threatening me of taking my property (a small piece of land) which is jointly owned by my wife and I. The credit card company has no relation with my land. Except this land, I have no money or assets and we live in a rental home.

My wife and I bought that land after our marriage and it is jointly on both of our names only. My wife has no relation in this credit card issue (the card was solely on my name).

I heard that there is a law called Tenants by the Entirety. Does this law completely protects our land from being taken away by the creditor if he ever files a lawsuit and wins (or stopping him from putting a lien on the land)? I also have plans of filing for bankruptcy if needed. If I file for bankruptcy, can the land (or part of it) be taken away by the bankruptcy court or someone?

Thank you
Thermal
 


LdiJ

Senior Member
Hello
I am from Quincy, FL. I am at default in paying my credit card debt and I have no way of paying it. My creditor is now threatening me of taking my property (a small piece of land) which is jointly owned by my wife and I. The credit card company has no relation with my land. Except this land, I have no money or assets and we live in a rental home.

My wife and I bought that land after our marriage and it is jointly on both of our names only. My wife has no relation in this credit card issue (the card was solely on my name).

I heard that there is a law called Tenants by the Entirety. Does this law completely protects our land from being taken away by the creditor if he ever files a lawsuit and wins (or stopping him from putting a lien on the land)? I also have plans of filing for bankruptcy if needed. If I file for bankruptcy, can the land (or part of it) be taken away by the bankruptcy court or someone?

Thank you
Thermal
Yes, if he sues you and wins a judgment a lien can and will be placed on the land if the creditor finds the land. Yes, its possible that the land can be taken by the bankruptcy trustee and sold to cover your debts, if you file bankruptcy. That does not guarantee that it will be taken and sold, but it can be.
 

thermal

Junior Member
Yes, if he sues you and wins a judgment a lien can and will be placed on the land if the creditor finds the land. Yes, its possible that the land can be taken by the bankruptcy trustee and sold to cover your debts, if you file bankruptcy. That does not guarantee that it will be taken and sold, but it can be.
If the property can be taken and sold, then what is the role/purpose of the Tenancy by entirety?
 

LdiJ

Senior Member
If the property can be taken and sold, then what is the role/purpose of the Tenancy by entirety?
To preserve the other party's right to their share of the proceeds. In all honesty I kind of doubt that the value of the land would be high enough that it would even been an issue in a bankruptcy, but its something that you need to be aware of.

If you want more specific answers you really need a consult with a local bankruptcy attorney.
 

thermal

Junior Member
Thank you. I talked to two different bankruptcy attorneys and each one said in a different way: one of them said that the creditor/court cannot take the land and the other one said that they can.

I am confused.
 

justalayman

Senior Member
in a tenancy by the entirety any asset held as such IS exempt from judgment if the debt is against an individual party. In your case, yes, the property is safe from seizure at the moment but a lien can be placed on the property. If your wife predeceases you you will lose the exemption.


in a bankruptcy procedure the federal rules do not recognize a tenancy by the entirety so if one uses the federal exemptions, the land would not be exempt based on how the title is held.

in Florida state exemptions the tenancy by the entirety is recognized and as such allows the property to be exempted from seizure for the sake of an individuals bk although there is apparently a continuing struggle in this area and one may find their BK trustee reading the law a bit differently.



a bit if FYI:

almost any asset can be held as tenants by the entirety including bank accounts. It affords the same protections for those assets as would apply to real estate.
 

thermal

Junior Member
Thanks justalayman.

Hope my wife does not predeceases. We do not divorce. I claim my land is safe then.

About bank accounts: If I earn any money before the court makes a decision on my current debt payment and if I put that money in a tenants by the entirety bank account (my wife and I joint account) will that money be also safe (in the same way as my piece of land) from the court or the creditor?
 

justalayman

Senior Member
from what I have read it is not universally accepted that accounts held as tenancy by the entirety are truly safe but other sources say they are. It is the only thing that might allow it to be safe so it would be worth setting up regardless since the only other alternative is a jar buried in the backyard.


and while there is a court opinion stating a joint account of spouses should be considered to be held as tenancy by the entirety I would surely make sure and set it up that way so as to be certain there is no room for interpretation.
 

Zigner

Senior Member, Non-Attorney
I doubt the OP will be successful at squirreling money away and then claiming bankruptcy. I sure hope he isn't.
 

thermal

Junior Member
from what I have read it is not universally accepted that accounts held as tenancy by the entirety are truly safe but other sources say they are. It is the only thing that might allow it to be safe so it would be worth setting up regardless since the only other alternative is a jar buried in the backyard.


and while there is a court opinion stating a joint account of spouses should be considered to be held as tenancy by the entirety I would surely make sure and set it up that way so as to be certain there is no room for interpretation.
Thanks once again.

If the joint bank account is surely setup as tenancy by the entirety (and the credit card company files a lawsuit and/or win in the court) then still can we (my wife or I) can use the money in that joint bank account for genuine purposes such as buying groceries, paying bills, paying fee to kids, etc?
 

justalayman

Senior Member
Thanks once again.

If the joint bank account is surely setup as tenancy by the entirety (and the credit card company files a lawsuit and/or win in the court) then still can we (my wife or I) can use the money in that joint bank account for genuine purposes such as buying groceries, paying bills, paying fee to kids, etc?
From the case law I read; that would be correct.

The misunderstanding here is anything held as tenants by the entirety do not belong to one or the other parties. It is owned by the entity of the married couple. It is so strong that neither can break form of title without the agreement of the other.
 

latigo

Senior Member
Yes, if he sues you and wins a judgment a lien can and will be placed on the land if the creditor finds the land. Yes, its possible that the land can be taken by the bankruptcy trustee and sold to cover your debts, if you file bankruptcy. That does not guarantee that it will be taken and sold, but it can be.
Obviously you know zilch about the conditional rights of a Florida married couple to claim as exempt from execution, real and personal property, held in estates by the entirety, or judgment lien laws, or how the different bankruptcy courts in Florida treat the subject. The result being that you have posted nothing but your usual sophisms.

In the first place the act of perfecting a judgment lien DOES NOT require the judgment to "find the land" (that is, physically locate and identify it as you have irresponsibly stated.) Not in Florida or any other state. And your state of Indiana not excepted. (See: F. S. Section 55.10 Judgments, orders, and decrees; lien of all, generally; extension of liens; etc.)

Secondly, in Florida property held in an estate by the entirety is exempt from execution unless the spouses are found to be jointly liable for the underlying indebtedness. Sitomer v. Orlan, 660 So. 2d 1111 (Fla. 4th DCA 1995)

Which, interestingly, is also true in YOUR VERY OWN STATE OF INDIANA! See: Ind. Code § 34-55-10-2(C)(5); see also Diss v. Agri Bus. Int’l, 670 N.E.2d 97, 99 (Ind. Ct. App. 1996) (“A tenancy by the entirety is immune from seizure)

Thirdly, your misinformed, equivocal guesswork that should the OP seek creditors relief under the bankruptcy code that the trustee could seize the land for the benefit of unsecured creditors is in stark contrast with the case of Mitchel vs. Brook, Trustee US Bankruptcy Court Middle District Florida Tampa Division Case No. 8:04 bk-11064 PMG as follows:

"If the Debtor and her husband acquired their interest in the Property as tenants by the entireties, then the Debtor's interest may be exempt from her Chapter 7 estate pursuant to §522(b)(2)(B) of the Bankruptcy Code, and the Trustee may not be authorized to sell the property pursuant to §363(h)."
 

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