Filing Question

[mickey123]

My wife and I have a significant amount of credit card debt. We have spoken to two attorneys re: filing Chapter 7. The problem is that we may lose our car which is paid in full and some out of state property. I just realized that both the car and the property is in both of our names which should offer us some protection by being tenancy by the entirety. However, if we jointly file, the protection is lost. I was wondering if we filed separately, would we get TBE protection? Of course there would be double filing fees.
Any comments would be appreciated.

[shipo]

I don't know enough about the rules of Chapter 7 to offer any advice on your specific question, however, my gut tells me, if you are trying to protect your car and some property, Chapter 13 might be a better option for you and your wife.

[justbroke]

Welcome to BKForum.

If you file separately to protect the property, wouldn't the United States Trustee (UST) or Chapter 7 Trustee claim bad faith? I don't know. As you wrote you can't use TBE against joint creditors. So it would likely fail anyhow since your debt is already shared (joint debt).

I don't know if it's still major caselaw or was subsequently overturned, but the case for Florida is In Re Planas from 1996. That case has been cited in other Florida cases at least 12 times and most recently cited in In Re Collins in 2019. The Trustee even proffered, in Planas, that if simply one creditor could pierce the veil of the TBE, then the exemption should fall and be unavailable to shield the property from any creditor. I think the judge, Cristol, agreed.

In a memorandum decision that began to stir discussion almost immediately, Judge Cristol substantially eroded, if not completely eliminated, a debtor’s ability to claim an exemption pursuant to 11 U.S.C. §522(a)(2)(B) for TBE property if the debtor and the debtor’s nondebtor spouse have any joint debt

In re Planas, 199 B.R. 211 (Bankr. S.D. Fla. 1996)

As shipo mentioned, Chapter 13 could be better if you're trying to save property. The Chapter 13 would need to, at minimum, propose to pay at least as much to the unsecured creditors as they would have received had you filed Chapter 7. Other issues could be that you're in a Chapter 7 because of that minimum, or because of your income.