Bankr. E.D.N.C.: In re Smith- Widow’s Exemption and Tenancy by the Entireties


The Debtor, 71 years old, was married until her husband died in 1999. At the time of his death, he was the sole owner of a house and land, purchased in 1962, with a mortgage signed by both the Debtor and her husband, and which the Debtor later inherited, pursuant to his will. Upon filing bankruptcy, the Debtor sought to claim the increased “widow’s” exemption of $60,000 in the property, based on N.C.G.S. § 1C-1601(a)(1), which in addition to the regular $35,000 homestead exemption, which provides that heightened amount “so long as the property was previously owned by the debtor as a tenant by the entireties or as a joint tenant with rights of survivorship and the former co-owner of the property is deceased.” The Trustee objected as there was no evidence that the Debtor was an owner of the real property prior to her husband’s death.

Starting from Mims v. Mims, 305 N.C. 41, 286 S.E.2d 779 (N.C. 1982), the bankruptcy court held that “when a spouse provides the consideration to purchase property in the name of the other spouse, the property is presumed to be a gift to the spouse in whose name the property is titled, regardless of whether the husband or the wife furnished the consideration.” This presumption was, however, rebutted in the present case by the Debtor’s testimony that the house was purchases as their family home, that her payments on the mortgages were not intended as a gift to her husband, and the Debtor continued paying for and maintaining the property following her husband’s death, as she had prior to his passing. Further, Mims was not exactly on point as here the Debtor and her husband had jointly been liable on the mortgages, indicating a desire for the property to be Tenancy by the Entireties, whereas in Mims only the non-owner spouse liable for the mortgages. Accordingly, the exemption was allowed.

For a copy of the opinion, please see:

Smith- Widow’s Exemption and Tenancy by the Entireties


1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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