A married client in the District often has a debt problem that belongs to one spouse. The credit cards are in his name, the old business guaranty is in her name, the medical bills came from one person's illness. The house is in both names. Whether that house is at risk in a bankruptcy filed by the indebted spouse alone turns on a form of ownership most homeowners have never heard of.
What tenancy by the entirety is
Tenancy by the entirety is a form of co-ownership available only to married couples. The District of Columbia recognizes it, and a deed to a married couple as husband and wife, or as spouses, creates it unless the deed says otherwise. Each spouse owns the whole, neither can convey or encumber the property without the other, and on one spouse's death the survivor takes everything without probate.
The feature that matters in bankruptcy: under District law, property held by the entirety cannot be reached by a creditor of only one spouse. A judgment against the husband alone cannot be enforced against the entireties home. Only a creditor to whom both spouses are liable can reach it.
How it carries into bankruptcy
When one spouse files alone, that spouse's interest in the home becomes property of the bankruptcy estate. But 11 U.S.C. § 522(b)(3)(B) allows a debtor who uses state exemptions to exempt "any interest in property in which the debtor had, immediately before the commencement of the case, an interest as a tenant by the entirety" to the extent that interest is exempt from process under applicable nonbankruptcy law.
In the District, that means the filing spouse's interest in an entireties home is exempt as against every creditor who holds a claim against that spouse alone. The Chapter 7 trustee steps into the shoes of those creditors and, like them, cannot reach the property.
This is separate from, and in some cases better than, the DC homestead exemption. The homestead exemption under D.C. Code § 15-501(a)(14) protects the equity in your residence against all creditors, but it requires the property to be your residence and it only applies if you elect the DC exemptions. The entireties protection covers any real property held by the entirety, residence or not, and it is available regardless of how the property is used, as long as you elect DC exemptions rather than the federal set. A married filer choosing between the DC and federal exemption schemes needs to account for this; the trade-offs are in DC vs. Federal Bankruptcy Exemptions.
The joint-debt exception, which swallows the rule for some couples
The protection is only as good as the separation of the debts. The trustee can administer entireties property to the extent there are joint creditors, meaning debts on which both spouses are liable. Common joint debts include:
- the mortgage and any home equity line (secured, so they are paid from the home anyway)
- jointly signed credit cards and personal loans
- a car loan both spouses signed
- joint income tax liabilities, when a joint return was filed and tax is owed
- medical debt for which District law makes both spouses liable
If the joint unsecured debt is small, the trustee can typically be satisfied by a modest payment and the home is safe. If the joint unsecured debt is large, the trustee can sell the entireties property to pay it, and the entireties protection provides nothing against those creditors. A couple with $40,000 of jointly signed credit card debt gains little from one spouse filing alone; a joint filing, or a Chapter 13, is the better analysis.
Other entireties property
DC recognizes tenancy by the entirety in personal property as well as real estate, including bank accounts titled to both spouses, if the account was set up that way. Whether a particular account qualifies depends on the bank's paperwork, and it is worth pulling the signature card before filing. Joint accounts are covered separately in Joint Bank Accounts and Bankruptcy in DC.
When it fails
- Divorce or death before or during the case converts the entireties into a tenancy in common or sole ownership, and the protection ends. Timing a bankruptcy around a divorce is covered in Bankruptcy and Divorce in DC.
- A deed that says "joint tenants" or "tenants in common" does not create an entireties estate, even for a married couple.
- Property acquired before the marriage in one spouse's name and never retitled is not entireties property.
- Federal tax liens. The IRS can reach a taxpayer's interest in entireties property notwithstanding state law, so the protection does not run against a federal tax claim.
Frequently asked questions
Do we have to file together if the debt is joint? No, but you should run the numbers both ways. A joint case costs the same filing fee as a single one and resolves the joint debt for both of you; a single case leaves the non-filing spouse fully liable on every joint debt.
Does my spouse's income count if I file alone? Yes, for the means test and for the budget schedules. The household's income and expenses are reported even when only one spouse files.
Can I retitle the house to entireties right before filing? A transfer into entireties shortly before filing, made with the intent to shield the property, is a fraudulent transfer the trustee can avoid. Deeds that already exist are protected; deeds created for the filing are not.
The DC means test calculator runs the household numbers in three minutes and is the first step in deciding whether one spouse or both should file.
DC Chapter 7 Means Test Calculator
Four steps, three minutes, 2026 DOJ median income figures for District of Columbia households. Find out whether you pass the means test before you talk to anyone. Social Security is excluded the way the Code requires.
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