The most important investment a consumer makes is usually their home. If your married and you purchased your home, you get a special protection from your creditors. That is because your home is titled as tenants by the entirety (t by e). That means under common law, only creditors of both spouses can pursue a claim against that t by e property. Thus when a mortgage (Deed of Trust or DOT) is obtained, it creates a lien that collateralizes the residence. If both spouses signed the DOT, but only one spouse signed the note, the lien is still valid against the property but the note is only owed by the signing spouse. What happens if the DOT, is signed by one spouse and the property is owned t by e? No lien and property is potentially owned free and clear! Big!
Thought for the day - check your mortgage documents before, during and after bankruptcy.
It's really interesting how the home is protected from being persued by a creditor.
Posted by: Spencer Hale | August 19, 2011 at 06:52 PM
Married couples give importance to their choice of residence as much as they value the plans they have for their family. So they make sure to avoid 'third-party' debt troubles.
Posted by: Darius Degross | January 03, 2012 at 09:46 AM