Avoiding Clouds on Homestead Exemptions[1]

Avoiding Clouds on Homestead Exemptions[1] | Wayne Greenwald

We represent a debtor with a substantially younger, non-debtor spouse and equity in their home, exceeding the debtor's homestead exemption. The home is owned as tenants in the entireties. This means that the surviving spouse inherits the property free and clear of the deceased spouse's creditors. The spouse's youth dissuaded the chapter 7 trustee from trying to sell the home free and clear of both owner's interests.[2] The trustee got creative. She tried selling just the debtor's interest in the house. The buyer gets the right to live with the non-debtor. That right would never be used.

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