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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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Question regarding Florida BK law and Tenancy By Entirety exemption.

Customer Question

Question regarding Florida BK law and Tenancy By Entirety exemption. My wife has insurmountable medical bills due to emergency surgery and no insurance. She will declare Ch. 7 BK. We own and live aboard a sailboat which is FL registered in both our names under tenancy by entirety. I understand that this asset (our only major asset) will be exempted because of the TBE.

I just walked away from an unsuccessful franchise business and they will likely get a judgement against me (just me, not my wife)for around $31,000. I will go BK separately from my wife, so I can claim the TBE exemption for our sailboat home. My questions are: can I legally do this, if so, should I file my BK after my wife, or at the same time, or does it make any difference? If she claims TBE to keep our boat, is there a law that states only one spouse can do this one time, or will I be able to claim TBE when I file?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

Hi JACustomer,

The boat cannot be taken by any creditors that are holding debt from one spouse only. This rule also applies in a Bankruptcy court, where the boat cannot be taken to satisfy the debts of either spouse if no debt is joint. This would be the case whether you file separately or jointly.


I think this is what you wanted to know. If not, please let me know.
Thank you!

Customer: replied 5 years ago.
Thank you for your prompt answer. So, as my wife's creditors are only seeking redress from her and my creditor is only seeking redress from me, then we can file BK together and, using the TBE, our boat is exempted, correct? (Sorry to repeat, but this is very good news for us and I just want to confirm...


Expert:  cfortunato replied 5 years ago.
Yes - the boat is exempt from collection for any debt that belongs to only one spouse. If all debts are in this category, the boat would also be exempt from the Bankrutpcy court, whether both file together or separately.
You can also try to use the homestead exemption for the boat, since you are living on it. However, some Bankruptcy judges allow this (using the homestead exemption for a boat that is not a houseboat) and some do not.

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