How is Property Owned as Tenancy By the Entirety Treated in a Bankruptcy Case?

Are you considering a personal bankruptcy filing but concerned about how jointly owned property will be treated in your bankruptcy case? Our West Palm Beach bankruptcy lawyer can help. In Florida, there is no straightforward answer to give you. Instead, the way in which jointly owned property will be treated in a bankruptcy case will depend on a number of factors, including the type of bankruptcy filing, how the property is jointly owned, whether both (or all) property owners are filing for bankruptcy, and whether the property is owned as tenancy by the entirety by two married spouses. We can provide you with a basic overview below, and a dedicated attorney at Kelley Kaplan Delaney & Eller, PLLC can speak with you today about your particular circumstances.

Jointly Held Property and Bankruptcy

The treatment of jointly held property can get complicated in a personal bankruptcy case when only one of the property owners is filing for bankruptcy, and especially when they are filing for Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, the portion of jointly owned debt (regardless of who the co-owner might be) can typically be worked into the terms of the repayment plan. In a liquidation bankruptcy under Chapter 7, the process can become more complex.

When two spouses own property together and only one of the spouses is filing for bankruptcy, the process may be more straightforward than you think, however. This is due to tenancy by the entirety ownership.

Tenancy by the Entirety and Your Bankruptcy Filing

Tenancy by the entirety is a specific type of joint property ownership that is only available to married spouses in Florida. Under Florida’s tenancy by the entirety law, a creditor cannot require the sale of property owned by two spouses as tenants by the entirety, or place a lien on the property, or take related actions.

Tenancy by the entirety ownership provides very strong protection to married couples. As such, the property typically cannot become part of the filing spouse’s bankruptcy estate, but it will be important to discuss the details of the debt and ownership with your bankruptcy lawyer.

For other types of jointly owned property other than property owned by joint tenants under Florida law, the portion of the debtor’s ownership in the property will typically be determined for purposes of the debtor’s bankruptcy estate.

Contact Our West Palm Beach Bankruptcy Lawyers for Help with Questions About Property in Your Bankruptcy Case 

Many people in Florida, especially married couples and other family relations, own property jointly. When property is owned jointly, it can pose certain complications in a bankruptcy case, especially when only one of those property owners is filing for Chapter 7 bankruptcy. If you have questions about how jointly owned or co-owned property is likely to be handled in your bankruptcy case, one of the experienced West Palm Beach bankruptcy attorneys at Kelley Kaplan Delaney & Eller, PLLC can speak with you today about your particular circumstances. Contact our firm to learn more about the services we provide to individuals and married couples filing for bankruptcy in South Florida.

Source:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0600-0699/0689/Sections/0689.115.html