PA home exemption C7 question

[KevFinnerty]

I'm wondering if I am not interpreting this legalese correctly for Chpt7 in PA:

PA - Homestead:
None, but tenancies by the entirety are exempt without limit as to debts of
one spouse


Does this mean that if taking the PA exemptions that there is "NO EXEMPTION" for a house?? (which is how I originally interpreted it)

Or are they saying that if there is only one spouse (or a single person) that the entire house is exempt??? The disclaimer after "none" makes zero sense to me.

[justagirl]

Hi there.

I filed for BK pro se in Pennsylvania. I don't have an answer to your question, as I was confused about that myself when I was first researching. I ended up using the Federal BK exemptions, as they are permitted to be used in Pennsylvania, and they seemed better than the PA exemptions. Just thought I'd share that info with you...I don't know if you checked out the Federal BK exemptions, but it might be worthwhile.

Good luck!

~JAG

[KevFinnerty]

Thanks. Yeah, it seemed the Fed exemptions were better....esp since it looked like no exemption at all for house in PA (?). But it is very confusing.

[jdcat]

I believe what that means is if you are married and file bk on your debts only your home would be completely protected because the non-filing spouse has the protection of tenancies by entirety. So the home could not be touched by the bk if one spouse does not file.

[KevFinnerty]

I believe what that means is if you are married and file bk on your debts only your home would be completely protected because the non-filing spouse has the protection of tenancies by entirety. So the home could not be touched by the bk if one spouse does not file.

Interesting - so if I get married and declare bankruptcy my house (which is basically my only asset) would be 100% protected?? What a crazy loophole. Although I guess the purpose is so that the spouse would not be thrown out on the street along with the debtor.

[aimlow]

So what does that mean...

I am about to file Chap 7.
My wife and I are both on the loan and the deed.
She is not filing...
So does that mean the house can not be touch?

Please reply if you have an answer...

[justbroke]

A tenancy by the entireties (TBE) claim is tricky and you should use an attorney if you're claiming TBE (in my book). The key is, that unless you have joint debts no creditor could get at the equity in the property -- the home. If you share debts, which is highly common in marriage, then the property is not exempt from the reach of creditors.

So, it sounds easy, but people who generally use TBE claims to exempt property, have done so through careful asset protection planning up front.

Also, this means that only one spouse can file. Strategically, and for those who actually do asset protection planning, they would title the large assets (property) in the name of both spouses (titled as a TBE if necessary in your particular State), and only incur unsecured debt in the other spouse's name. Of course, this may not work in a community property State... so it does matter how you plan this. Probably only the really wealthy (or rich) do this type of careful planning and incurring of debt within a marital unit.

Just my thoughts.

[aimlow]

Well the house is in both our names with the loan...

All debts (CC) is in my name, she has very few in hers... NO JOINT ACCOUNTS on any CC...

So what does that mean...?

[justbroke]

So what does that mean...?

It means speak to an attorney. You need to be certain that there are no joint creditors, not just a guess. When consulting your attorney, ask about the way to exempt the home under TBE. I do not know if Pennsylvania requires that the Title actually read "Mr. John Doe and Mrs. Jane Doe, as tenants by the entirety" in order for it to be a true TBE. Some States automatically create a TBE when property is acquired jointly... others require you to specify, otherwise it's a tenancy in common.

Remember, this is more than just credit cards. I suggest you speak with an attorney to see if this is a clear way to exempt your property. I'm assuming you have a lot of equity in the property? If you have no equity in that house, this is a non-issue.

[KevFinnerty]

THANKS for the explanations on this. I understand the exemption & clause now.