Invoking the Joint Property Exemption in Bankruptcy
Under a unique facet of Tennessee law called tenancy by the entirety, a home or other vulnerable assets jointly owned by a married couple may be protected when one spouse files bankruptcy and the other does not. This can be an invaluable exemption that avoids forfeiting the property or losing equity.
Nashville attorney David F. Cannon is a board-certified specialist in bankruptcy law who has handled thousands of bankruptcy filings in 20 years of practice. He has helped countless married couples in Middle Tennessee take full advantage of bankruptcy through tenancy by the entirety and other legal strategies.
Tenancy by the Entirety in Tennessee Bankruptcy
In Tennessee, a married couple's real property (house) is titled by the entirety. They both own it and have rights to use it, and both spouses must consent to sell it or borrow against it. In bankruptcy, however, spouses may file jointly or one spouse may file as an individual.
When only one spouse files bankruptcy, there is a conflict with the tenancy by the entirety. The courts have ruled that taking the property would unjustly deprive the non-filing spouse of his or her property rights. If you own a house together and meet the criteria, the bankruptcy trustee can't touch it no matter how much equity you may have.
There is a catch. The shield of tenancy by the entirety only works if there is no unsecured debt between the spouses. If you are both on the hook for a pile of credit card debt, for example, you can't claim the exemption. If unsecured debts are held separately, the exemption still applies.
Does the Tenancy by the Entirety Exemption Apply to You?
Our lawyers are knowledgeable about all bankruptcy property exemptions. We can help you weigh the pros and cons of joint versus individual filing and whether you qualify to exempt your house through tenancy by the entirety.
David F. Cannon is certified as a Consumer Bankruptcy Specialist by The American Board of Certification and The Tennessee Commission on Continuing Legal Education and Specialization. Call 615-800-3725, toll free at 877-696-8680, or e-mail our law office today to arrange a confidential consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
