Q: Spouse Filing for Bankruptcy - What happens to "Joint in Entirety" property?
We are in Michigan and we were debt free on our main home. Our main home is owned "Jointly in entirety".
About 4 years ago we decided to take out a Mortgage and buy several investment properties with the proceeds. All 3 properties were placed into Joint in Entirety ownership on the deeds at time of purchase and have remained that way.
One spouse is the main breadwinner and has had a recent loss of income of nearly $1,000.00 per month and can no longer pay all of his monthly expenses. The debt that he has from an old legal issue and his personal credit cards is sufficient to file for Chapter 7 in Federal Court.
The question is: Can the trustee force the sale of the investment properties that were bought with Joint In Entireties money and that have always been Jointly owned?
I've tried doing some research on my own and I see one example in Michigan where Joint In Entireties property was taken but it was only because it was the IRS. I see none other than that.
A:
You have wandered into a complex area of the law.
I assume that the case you are referring to is the Craft case. That's not an easy case to start with if you do not have a thorough understanding of exemption law. If you understand it and are not an attorney, you are well above average in your understanding of the law.
If there is no joint debt the tenancy-by-the-entirety exemption may be possible if you choose the "state" exemptions. But there are several possible pitfalls. I recommend that you consult with a bankruptcy attorney who is an expert of exemptions rather than someone who dabbles in bankruptcy.
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