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Ely, Counselor at Law
Category: Bankruptcy Law
Satisfied Customers: 102145
Experience:  Licensed attorney in private practice.
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I own a house in Maryland. Even though I bought the house

Customer Question

I own a house in Maryland. Even though I bought the house using my own personal fund and personal mortgage; I agreed to put my wife on the deed of the house in 2005. Since then, I own and pay the mortgage but she is on the deed of the property. Recently she filed Chapter 7 Bankruptcy on her own; and the Trustee is threatening to sell my house to pay her creditors. Can he sell my house, a house that we own in 'entirety'?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

I am sorry to hear about this situation. Maryland is a common law property state (as opposed to a community property state). That means that a a Chapter 7 trustee may be able to sell the entire property even if held jointly, provided that neither portion is not exempt. The trustee must be able to prove that the benefit of selling the property as a whole outweighs any detriment to the joint owners.

So the Court may disagree with the trustee and disallow the sale, but the point is, they can try it.

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Customer: replied 1 year ago.
Are you sure? I found this on a legal document ...
The following jurisdictions recognize tenants by the entirety property in some form: Alaska, Arkansas, Delaware, District of Columbia, Florida, Hawaii, Indiana, Kentucky, Maryland, Massachusetts, etc. See Craig, supra note 3, at 295; Grilliot & Yocum, supra note 9, at 354
Customer: replied 1 year ago.
I also found this: Jurisdictions that exempt entirety property from the claims of creditors of individual debtors are as follows: Delaware, Citizens Sav. Bank, Inc. v. Astrin, 44 Del. 451, 455, 61 A.2d 419, 421 (1948); District of Columbia, In re Estate of Wall, 440 F.2d 215, 218 (D.C. Cir.1971); Florida, First Nat'l Bank v. Hector Supply Co., 254 So. 2d 777, 781 (Fla. 1971); Indiana,Baker v. Cailor, 206 Ind. 440, 444, 186 N.E. 769, 770 (1933); Maryland, Annapolis Banking & Trust Co. v. Smith, 164 Md. 8, 9, 164 A. 157, 158 (1932); Etc.
Expert:  Ely replied 1 year ago.

Yes, I am sure. While these jurisdictions recognize tenants by entirety, that does not mean that the Chapter 7 trustee cannot sell non-exempt property that is jointly held if they can prove that the benefit of selling the property as a whole outweighs any detriment to the joint owners - in a common law state. See HERE.

The trustee would not be threatening to do something they cannot do, anyhow.

Gentle Reminder: Please, use REPLY or SEND button to keep chatting, or RATE POSITIVELY and SUBMIT your rating when we are finished. You may always ask follow ups at no charge after rating.

Expert:  Ely replied 1 year ago.
Hello again. This is a courtesy check in to see if you needed anything else in regards ***** ***** question because you never responded or replied positively. I am simply touching base. Let me know. Thanks!