TBE interesting question

[blackomega]

I filed chapter 7 bankruptcy a couple of years ago here in Florida which was successfully discharged. At the time my wife, who had a couple of seperate credit cards of her own and one joint card with me (all defaulted due to the financial reason I filed BK), decided she did not want to file, against my and my attorneys pleas. She had it in her mind that she would try to pay them back when things got better, which they still haven't as she is now unemployed, she is stubborn that way.

Fast forward to now and we have a letter regarding the card we had jointly which was disharged for me but she still owes. I did some looking and this is the JDB/law firm that does and will go to court. I figure she may have 30 days or so before they file and this firm will go after garnishments and writs of execution where possible from what I see on the dockets. In our current situation, if it goes to court, it might make it to judgement before we have the money to file BK for her. She will have the full Florida exemptions which would cover her half of the property we have left with my half being protected by the discharge of my C7.

That being said I have a few questions for any law gurus, first our checking is funded by my income from work, what can we do to protect that from any attempts at garnishment? I know in Florida that head of household wages in a bank account that can be directly linked to such wages are exempt, but these are mine for a discharged debt so what do we do to prevent any attempts to take it? And lastly can our personal property which would meet the six tenets of Tenants By the Entireties be protected that way? The reason I ask is not that I am worried her exemtions won't cover the property but it would be interesting to me to see if it would since this was a joint debt but now is a sole debt due to the BK. I have read some conflicting information on the net butit centers around BK and joint debt vs judgment and joint debt where 1 spouse was discharged and the other non-filing.

Thanks in advance and I hope this made sense.

[justbroke]

That being said I have a few questions for any law gurus, first our checking is funded by my income from work, what can we do to protect that from any attempts at garnishment? I know in Florida that head of household wages in a bank account that can be directly linked to such wages are exempt, but these are mine for a discharged debt so what do we do to prevent any attempts to take it?

Be very careful. Head of household wages are protected to a certain dollar value only! It doesn't protect "all" wages.

And lastly can our personal property which would meet the six tenets of Tenants By the Entireties be protected that way?

They cannot just "meet" the Tenants by the Entireties (TBE) protection. They must actually be titled at TBE! For example, on the application for Title of a motor vehicle in Florida, you can use "or" or "and" to connect the names, and you can check the boxes for "Tennants by the Entireties" and/or "With Right of Survivorship". If the TBE box is not checked, then the operative word is that conjunction ("or" or "and"). If it's "or" then you each own it 100% and either can "sell or dispose" of it without permission. If it's "and", then you could only protect 50% of the interest in the property as non-debtor co-owner.

I would make sure I start speaking with a few asset planning attorneys to see a strategy. If you have a home, she would only have a $1,000 wildcard. If you don't own a home -- or not claiming or receiving the benefit of the homestead exemption -- then she would have $4K in wildcard to use.

Since Florida is not a community property state, your non-filing spouse doesn't get the theoretical discharge.

[blackomega]

Be very careful. Head of household wages are protected to a certain dollar value only! It doesn't protect "all" wages.

They cannot just "meet" the Tenants by the Entireties (TBE) protection. They must actually be titled at TBE! For example, on the application for Title of a motor vehicle in Florida, you can use "or" or "and" to connect the names, and you can check the boxes for "Tennants by the Entireties" and/or "With Right of Survivorship". If the TBE box is not checked, then the operative word is that conjunction ("or" or "and"). If it's "or" then you each own it 100% and either can "sell or dispose" of it without permission. If it's "and", then you could only protect 50% of the interest in the property as non-debtor co-owner.

I would make sure I start speaking with a few asset planning attorneys to see a strategy. If you have a home, she would only have a $1,000 wildcard. If you don't own a home -- or not claiming or receiving the benefit of the homestead exemption -- then she would have $4K in wildcard to use.

Since Florida is not a community property state, your non-filing spouse doesn't get the theoretical discharge.

Thanks for the quick reply JB. I definitely understand that my wife was not discharged as she did not file BK and I believe I understand how TBE works (at least I think I do ) from what I have read, in Florida it doesn't necessarily need to be titled to be TBE (in the case of titled property unless real property it must be AND), case law seems to support that tangible untitled personal property is considered TBE as well as long as the six tenets of TBE are met. My question for TBE is would it apply for debt that was joint in the beginning and is now a sole debt of my wifes due to my discharge from the debt in BK? As for the account, the wages that are deposited from my job should be fully protected in any amount for 6 months from what I read in FL statute 222.11 (see below) unless I am mistaken in my interpretation. Again any help would be appreciated as I am still fully unsure. It seems that the creditor of which I now have no part of would have to talk me into allowing them to garnish my wages for a debt I no longer owe but I need to be sure.

222.11 Exemption of wages from garnishment.—
(1) As used in this section, the term:
(a) “Earnings” includes compensation paid or payable, in money of a sum certain, for personal services or labor whether denominated as wages, salary, commission, or bonus.

(b) “Disposable earnings” means that part of the earnings of any head of family remaining after the deduction from those earnings of any amounts required by law to be withheld.

(c) “Head of family” includes any natural person who is providing more than one-half of the support for a child or other dependent.


(2)(a) All of the disposable earnings of a head of family whose disposable earnings are less than or equal to $750 a week are exempt from attachment or garnishment.

(b) Disposable earnings of a head of a family, which are greater than $750 a week, may not be attached or garnished unless such person has agreed otherwise in writing. The agreement to waive the protection provided by this paragraph must:
1. Be written in the same language as the contract or agreement to which the waiver relates;

2. Be contained in a separate document attached to the contract or agreement; and

3. Be in substantially the following form in at least 14-point type:
IF YOU PROVIDE MORE THAN ONE-HALF OF THE SUPPORT FOR A CHILD OR OTHER DEPENDENT, ALL OR PART OF YOUR INCOME IS EXEMPT FROM GARNISHMENT UNDER FLORIDA LAW. YOU CAN WAIVE THIS PROTECTION ONLY BY SIGNING THIS DOCUMENT. BY SIGNING BELOW, YOU AGREE TO WAIVE THE PROTECTION FROM GARNISHMENT.

(3) Earnings that are exempt under subsection (2) and are credited or deposited in any financial institution are exempt from attachment or garnishment for 6 months after the earnings are received by the financial institution if the funds can be traced and properly identified as earnings. Commingling of earnings with other funds does not by itself defeat the ability of a head of family to trace earnings.

[blackomega]

As a side note, from what I read is that BK courts in KOSSOW and also in CALIRI seem to say that even non-titled personal property can be considered TBE. Also it seems to be that unless the bank explicitely states that TBE is not allowed on their documentation then even a standard joint account opened with the intent of being TBE would allow TBE to apply. But again I never attended law school so all this is above my head. Here is what I read from http://www.gassmanbateslawgroup.com/Outline.1c.pdf, I hope only the snippits and not the whole article with the link back is OK to post. If not please delete. The same publication also discusses TBE in the case of joint accounts where they are not expressed as TBE but indeed are due to how the BEAL BANK decision is applied.

J. TANGIBLE PERSONAL PROPERTY (PHYSICAL NON-REAL ESTATE
ASSETS). The Supreme Court in the Beal Bank case did not discuss whether tangible personal
property “would be held” as tenants by the entireties without proof of that form of ownership.
Bankruptcy Court decisions, In re Kossow, 325 B.R. 478 (S.D. Fla. 2005) and In re Caliri, 347
B.R.788 (M.D. Fla. 2006), have concluded that the Beal Bank decision applies to tangible personal
14
property acquired jointly by a husband and wife, unless an express disclaimer of entireties ownership
occurs.
In Kossow, the decision involved a grill and patio furniture that was found to be
transferred by the debtor to tenancy by the entireties, although there was no bill of sale or other
formal document confirming this.
Other cases have been as follows:
In re Matthews, 307 Fed.Appx. 266 (11th Cir. 2009) which is
discussed in Section D above under the topic of STOCK
CERTIFICATES, the court found that there is a trend towards
recognizing a presumption of tenancy by the entireties for all personal
property, not merely real estate. The court held that if all the unities
are present, a presumption should arise that a married couple
owns personal property as tenants by the entireties.
Also see the Hinton case described in Section G above under the
topic of TAX REFUNDS under the section above for similar
reasoning.
Will Florida law apply where tangible or intangible property is owned outside of
Florida? The case law is not consistent, but it appears from a number of cases that tangible personal
property (physical assets) will not be protected as tenancy by the entireties assets if physically located
in a state or jurisdiction that does not recognize tenancy by the entireties. On the other hand,
intangible assets, such as stock, partnership interests, and promissory notes should qualify as tenancy
by the entireties assets notwithstanding where they or the underlying entity involved would be
located. Cases supporting the above propositions relating to promissory notes are In re Koesling,
210 B.R. 487 (Bankr. N.D. Fla 1997) and In re Siegel, 350 So 2d. 89 (Fla. 4th DCA 1977) .

[keepmine]

That being said I have a few questions for any law gurus, first our checking is funded by my income from work, what can we do to protect that from any attempts at garnishment

Don't overthink this. There's the hard way to do things and then the easy way. If she's unemployed, close that joint account and open a personal account in just your name and you won't have to worry about defending a garnishment since, that debt was discharged to you in your bk.

[justbroke]

Yes, I think you're overthinking this too much. I was more concerned that you are 100% sure that it's TBE, and I was talking about property that required a title (cars, home, boats, etc). You have a moderately complex case, but if you already discharged your liability on most of this debt, then she could discharge her responsibility as well.

I guess your real issue is with wages and money in the bank. I ask that you seek an attorney. KOSSOW was based on Beal Bank, SSB v. Almand and Assocs., 780 So.2d 45, 52 (Fla. 2001), which was the Florida Supreme Court's precedent setting opinion that all personal property acquired in marriage are TBE, unless something else points otherwise. For example, some decisions were based on a tax return. If it's deposited into a joint bank account (TBE account), then the refund is a TBE. However, the chief Judge in the Middle District of Florida opined that if only one spouse works, then that Beal Bank, SSB v. Almand and Assocs. doesn't apply since only one spouse ever had an interest in the refund.

Also, with respect to head of household (HOH), it goes to PAST EARNINGS that are on deposit at a financial institution... not future earnings. Then it's only for "6 months" of earnings... so if you have substantial savings from HOH earnings over more than 6 months, you could be in trouble.

So, I'm just trying to say... be careful and seek legal advice. Sometimes these rulings are fact specific and unless you meet the entire facts of that specific case, you could stand to lose property.

[OHBOY]

On one hand I find it hallarious that the Trustee & Creditor in the Kossow case actually attempted to go after a grill and patio furniture , and it had to be sorted out in court whether or not it would be considered TBE property or not...at the same time, of course it's not funny at all...

This all very much reminds me of my divorce (years ago) were a big 'todo' was made in court since my spouse wanted to retain a pizza pan and a feather duster....lol

[SunshineGal]

For what its worth, TBE applied to all our personal property (Furniture, dishes, etc.) with the exception of our cars because we were idiots and titled them "Or".

One more thought. Once your wages hit a joing non TBE bank account it is open to garnishment. You can fight to get it back, but again, it gets tricky. If it were me I would probably open a new TBE account before the JDB is awarded a judgment.

FYI - I am not attorney.

[blackomega]

Thanks for all the great advice JB and everyone. Since I am not liable for this debt I have opened a new and seperate checking in my name only for deposits going forward. We only had 100.00 in savings so thats not a big deal so there is no money that goes back anymore than paycheck to paycheck. the big issue is protecting my paycheck as thats what we live on, her unemployment check is extremely small and goes solely for food. If anyone thinks there are any potential problems with me having a seperate account now then let me know. Many thanks all!

[SunshineGal]

I don't see any issues with you having a seperate account. Good luck and hope it all works out for you.