In Pennsylvania, as in many other jurisdictions, real holding owned jointly by a husband and wife – belongings held in a "tenancy by the entirety" – cannot be attached to satisfy the debt of just one spouse. Rather, a creditor only tin can attach entireties belongings if it has a judgment against both spouses. In a recent conclusion, the Pennsylvania Superior Court held that a creditor may non consolidate separate judgments against individual spouses into a single judgment that would enable the creditor to adhere entireties property, even if the split judgments chronicle to the aforementioned debt.

In ISN Banking concern five. Rajaratnam, a partnership that owned a belongings in Philadelphia borrowed near $7 million from ISN Bank in 2005 to finance a conversion of the holding into condominium units. Arasu Rajaratnam signed an understanding pursuant to which he personally guaranteed repayment of the loan. In 2007, in connectedness with the banking company'southward agreement to extend the maturity date of the loan, both Mr. Rajaratnam and his married woman signed an agreement guaranteeing repayment of the modified loan.

When the borrower defaulted on the loan, the bank confessed judgment in the amount of about $5 million against Mr. Rajaratnam under the 2005 guaranty understanding. The depository financial institution also sued Mrs. Rajaratnam nether the 2007 guaranty agreement, and obtained a $three.3 million deficiency judgment confronting her. The bank and then moved to consolidate the two judgments, presumably so that it could attach entireties property held by the Rajaratnams.

On appeal from the trial court's deprival of the banking company's motion to consolidate, the Superior Court affirmed. The Courtroom held that "divide actions by spouses resulting in divide judgments are non sufficient to encumber entireties property." Rather, "[t]o establish a joint debt that may serve equally the basis for a lien on entireties property, the two spouses must act together in the aforementioned transaction and in and then doing incur a joint liability." Because the judgments confronting Mr. and Mrs. Rajaratnam "were entered pursuant to separate documents, in separate transactions, and for divide considerations [and were] not even in the same amounts," the Court held that the judgments could not exist consolidated into a single judgment.

The ISN Banking concern case makes clear that lenders who are relying on entireties property as collateral for a loan must take care to not only accept both spouses sign a single guaranty, but as well must pursue and obtain a single judgment against both spouses simultaneously. The fact that both spouses accept guaranteed the same obligation may not be sufficient in the absence of single judgment against both spouses.

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