When it comes to bankruptcy, especially Chapter 7, or liquidation bankruptcy, individuals may be required to liquidate important assets such as their home in order to repay debts to their creditors. During this time of the coronavirus pandemic, many individuals are suffering from additional financial strain, and seeking solace from creditors and extensions on their mortgage payments.
Tenancy by the entireties is a concept that varies state by state and is a beneficial way for debtors to maintain or exempt some of their property during the bankruptcy process. Here, the qualified bankruptcy attorneys at Grossbart, Portney & Rosenberg, P.A. discuss what you should know about tenancy by the entirety in Maryland, and how you may be able to retain certain assets during this difficult time.
What Is Tenancy by the Entirety?
Tenancy by the entirety is a legal concept that treats both spouses as one entity in the eyes of the law when it comes to their property, each having an equal share and unable to transfer ownership or interest without the consent of the other party. Maryland is one of just a handful of states that allows tenancy by the entirety for married couples, including same-sex couples.
It’s important to understand how tenancy by the entirety could impact your bankruptcy case.
Essentially, each spouse in this situation has equal rights to the entire property, and neither party can unilaterally decide what happens to that property. Tenancy by the entirety can be a complex document, and it is important to do thorough research before moving forward in the bankruptcy process. However, in certain cases, tenancy by the entirety can be a blessing for couples in the midst of bankruptcy, preventing creditors from seeking out their home in Chapter 7 bankruptcy filings.
How Does Tenancy by the Entirety Impact Bankruptcy Cases?
When filing for bankruptcy, understanding tenancy by the entirety often becomes complex. When you file for bankruptcy, you must disclose the ownership of your property, including individual ownership, joint ownership, community property and more. When a married couple has a home under tenancy by the entirety, their home may be protected if they do not have any other joint unsecured debts.
For example, a husband and wife become financially unstable during the coronavirus pandemic. This couple has always kept their finances (credit cards, loans, etc.) separate from one another, with the exception of their home. If the husband declares bankruptcy, but there are no unsecured debts between the couple, creditors are unable to go after their home, unless they are pursuing both individuals for unpaid debts. Since the wife has no unpaid debts, the home will remain secured during the liquidation process, saving the couple from having to uproot their lives in the midst of bankruptcy. It is important to note, however, that each bankruptcy case is entirely unique, meaning that there may be exceptions to this rule. Please consider consulting with an experienced bankruptcy attorney, such as those at Grossbart, Portney & Rosenberg, P.A. to further understand laws and guidelines for Maryland.
Discuss Your Bankruptcy & Tenancy by the Entirety Options With Our Attorneys
There is no doubt about it, the bankruptcy process is difficult, time consuming, stressful and often confusing for many individuals. Tenancy by the entirety, especially during this time, is one of the most valuable options for debtors to maintain their property while working to repay their debts. While there have been certain forbearance extensions by the FHA, those who ultimately end up in bankruptcy should know that they are not out of options. At Grossbart, Portney & Rosenberg, P.A., you have a team of bankruptcy attorneys on your side that have extensive knowledge and experience in the intricacies of Maryland bankruptcy law. To see how our team can assist you in your bankruptcy proceedings, contact us by clicking here: https://www.mdbankruptcylaw.com/contact/