Dist. Ct. did not err in finding in instant Chapter 13 bankruptcy proceeding that debtor could properly designate as exempt her interest in marital home that was originally purchased as “tenants by the entirety” with her husband, but was subsequently conveyed to trust of debtor’s husband, with language in trust stating that “beneficial interest” in trust was held by debtor and husband as “tenants by the entirety.” While creditor argued that transfer of home to trust effectively destroyed tenancy in the entirety status of said home, relevant Illinois statute (Joint Tenancy Act, 765 ILCS 1005/1c) allowed debtor and her husband to transfer their interest in home to trust without destroying home’s tenancy in the entirety status. Moreover, creditor conceded that home was exempt property in bankruptcy proceeding as long as it retained tenancy by entirety status.
Federal 7th Circuit Court
Civil Court
Bankruptcy