Case Law Summaries

In re Rosa

• Opinion Date: April 17, 2001
• Real Property Law
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RIGHT OF POSSESSION—A bankrupt debtor’s right to joint possession of a marital residence is a property interest worthy of protection in a bankruptcy proceeding.

A married woman and her cousin purchased real property and executed a note and mortgage to purchase the property. The property was used as the marital residence for the woman and her husband. Several years later, the wife filed for divorce. She found a new home and the husband remained at the old one. When the wife and her cousin stopped making payments on the note, the mortgagee instituted a foreclosure action. After the final judgment of foreclosure, but prior to the sheriff’s sale, the husband filed for bankruptcy under Chapter 13 of the Bankruptcy Code. The husband’s bankruptcy petition listed the marital residence as a property in which he held an interest and listed the mortgagee as a secured creditor. The mortgagee filed a motion for relief from the automatic stay resulting from the Bankruptcy Code. The Court recognized that pursuant to N.J.S. 3B:28-3, “as to real property occupied jointly by a married person ... as their principal matrimonial residence, every married person shall be entitled to joint possession ... which right of possession may not be released, extinguished or alienated without the consent of both spouses.” The court further stated that “the statutory right conferred on each spouse is more substantial than a mere right to live in the marital dwelling. ... The right to joint possession makes the martial residence subject to equitable distribution upon dissolution of the marriage.” For these reasons, the Court concluded that “the right to joint possession under N.J.S. 3B:28-3 is a form of property interest in the marital residence, and the marital residence is ‘property of the debtor.’ Therefore, it denied the mortgagee’s motion and rejected its argument that the property could not be subject to the husband’s Chapter 13 bankruptcy plan.

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