Being Married Provides Some Protection From Judgment Enforcement
Getting married is not a defense to debt collection or judgment enforcement, and we don’t recommend you get married just as a way of evading creditors. However, it is true that being married provides some limited defense to collection actions. The defense comes from the long established legal principle that property owned by a husband and wife jointly cannot be taken to satisfy the debt of a single spouse.
What is Tenancy by the Entireties?
When a husband and wife own property together, it is known as a tenancy by the entireties (TBE). Just acquiring property while you are married doesn’t make property TBE. Rather, to get the legal protections that a TBE affords, property:
- Must be owned and controlled by both spouses
- Must have been acquired by both spouses at the same time, and during a time when the spouses were married
Of course, a lot of the property that we buy or acquire has no legal title. In those cases, it will usually be assumed that the property is TBE as long as the requirements of #2 are met. With property that does have a title, such as with cars, bank accounts, houses, or businesses, the name on the title or registrations will determine whether the requirements of #1 are met.
Be aware that there is a law that says that when bank accounts are opened by a married couple, the account is automatically presumed to be TBE property. Even if an account is only titled in one spouse’s name, if money is put in the account that meets the requirements of #1 and #2, the money maintains its TBE status, even though its put in a bank account titled in one spouse’s name.
Many couples, for different reasons, prefer not to have both names on the title to certain property. However, just be aware that if you do this, you could be losing TBE protections.
Once property is considered TBE, the TBE protection can only be undone by the death of a spouse, by divorce, or by documentation (for example, removing a spouse from corporate ownership of a business, or from the title to a car).
The Protection Afforded by TBE
To get the protections afforded by TBE, a creditor must be trying to collect a debt that is an obligation of only one spouse. Remember that just because you may both be sued on a debt does not mean the debt is joint. In many cases, creditors don’t even look at their own paperwork before suing. You should get original applications, loan documents, contracts, or other paperwork, to demonstrate that the debt only belongs to one spouse.
If a creditor tries to collect on a debt owed by one spouse, any property owned by TBE—that is, which meets the requirements to be called TBE property—is exempt from collection. This can make the decision to acquire property jointly a valuable asset protection defense, and a valid defense to the collection of any kind of judgment.
Contact the Miami consumer rights attorneys at Jacobs Legal today if you are in foreclosure or being harassed by debt collectors.