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Jointly Held Property in Bankruptcy

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Many people who are considering filing bankruptcy are very concerned about their property jointly owned with a spouse, sibling, or other person. These are real concerns as a bankruptcy filing could cause a joint-owner to lose his or her interest in the property. The exact affect a bankruptcy filing may have depends on who the joint-owner is, how the property is titled, and your state’s exemptions.

The most commonly held joint-property is property held by a husband and wife. In Florida, property owned by a husband and wife is presumed to be by Tenancy by the Entirety unless specifically specified otherwise. This type of joint ownership protects the property from the bankruptcy estate if only one spouse is filing bankruptcy and there are not any unsecured joint debts. Property held by a husband and wife as joint tenants with the right of survivorship is not afforded this type of protection.

The second most commonly held property is property inherited by siblings from a passing parent or other family member. Unless the property can be protected by a bankruptcy exemption, your siblings or other family member could lose their title to the property due to a bankruptcy filing. Unfortunately, the bankruptcy court does not care how you acquired the property. It could be through a gift, inheritance, purchase, etc., but once you have acquired the property, you have acquired it, and it is part of your bankruptcy estate. This means that if it is not protected by an exemption, the trustee could ask the court to order the sale of the property in order to settle your debts. This causes your joint owners to lose their title to the property. This is true for property held as joint tenants, joint tenants with the right of survivorship, and tenants in common.

Speaking with a bankruptcy attorney will help you decide whether bankruptcy is a good option for you. To find out whether your jointly owned property may be subject to your bankruptcy estate, contact the Law Office of David M. Goldman, PLLC at (904) 685-1200.

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