OPINION
In this appeal, we must decide whether a debtor’s solely owned fee simple interest in her home is part of the bankruptcy estate, even though the debtor held her interest as a tenant by the entirety when she filed her petition in bankruptcy and claimed an exemption of her tenancy-by-the-entirety interest. Beverly B. Cordova, the debtor, appeals an order of the bankruptcy court sustaining the objection of the Trustee, Robert G. Mayer, to Cordova’s claim of an exemption of her home under 11 U.S.C.A. § 522(b)(2)(B) (West 1993 & Supp.1995). The district court affirmed the bankruptcy court’s disallowance of the exemption, holding that the entry of Cordova’s divorce decree within 180 days of the filing of her voluntary bankruptcy petition caused her to lose the § 522(b)(2)(B) exemption for tenancy-by-the-entirety property and caused the interest to become property of the bankruptcy estate by operation of 11 U.S.C.A. § 541(a)(5)(B) (West 1993). Because we agree with the bankruptcy and district courts that Cordova’s exemption should be disallowed and that her fee simple interest in the home 1 became part of the bankruptcy estate upon the entry of her divorce decree, we affirm.
I.
On March 19, 1993, Cordova filed a voluntary petition in the United States Bankruptcy Court for the Eastern District of Virginia under Chapter Seven of the bankruptcy code. See 11 U.S.C.A. §§ 301, 701-728 (West 1993 & Supp.1995). In the schedule of real property attached to her petition, Cordova listed an interest in her marital home that she held as a tenant by the entirety with her husband. Cordova claimed an exemption for this interest under § 522 of the bankruptcy code, which provides for the exemption of entire-ties property from the bankruptcy estate in certain instances. See 11 U.S.C.A. § 522(b)(2)(B).
When she filed the petition, Cordova’s divorce proceeding was pending in Virginia state court. Approximately five months later, the final divorce decree was entered on August 18, 1993. Under Virginia law, the decree automatically extinguished the tenancy by the entirety and all contingent rights in the home, including the right of survivorship, by operation of law. See Va.Code Ann. § 20-111 (Michie 1995). Moreover, the divorce decree awarded Cordova sole ownership of the fee simple interest in the marital home; her ex-husband received a monetary lien on the home representing twenty-five percent of the equity.
Relying on title 20, section 111 of the Virginia Code, Mayer, the Trustee, filed an objection to Cordova’s claimed exemption for her interest in the home, arguing that Cordo-va’s divorce caused her to lose her exemption for entireties property under 11 U.S.C.A. § 522(b)(2)(B). Because Cordova’s divorce occurred within 180 days of the filing of her bankruptcy petition, Mayer asserted that the fee simple interest that Cordova then held in the home had become property of the bankruptcy estate through § 541(a)(5)(B) of the bankruptcy code. The bankruptcy court agreed, and the district court subsequently affirmed.
In urging us to reverse the order of the district court, Cordova makes two arguments. First, Cordova contends that the exempt status of a debtor’s assets is determined on the date the bankruptcy petition is filed and that post-petition events do not affect the applicability of the exemption. Second, Cordova asserts that she did not acquire a new “interest in property” under § 541(a)(5)(B) as a result of the divorce decree because she owned a fee simple interest in the home both before and after the divorce. Thus, in Cordova’s view, the change in the form of her interest, from concurrent to sole ownership, did not produce a new “interest in property” that could become part
II.
Under § 541 of the bankruptcy code, the bankruptcy estate comprises “all legal or equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C.A. § 541(a)(1) (West 1993). Section 541 includes in the bankruptcy estate a debtor’s interest in entireties property.
Fairfield v. United States (In re Ballard),
Section 522(b)(2)(B), however, exempts from the bankruptcy estate “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 the interest “is exempt from process under applicable nonbankruptcy law.” 11 U.S.C.A. § 522(b)(2)(B). Under Virginia law, only joint creditors of both spouses can reach property held as a tenancy by the entirety — individual creditors of either spouse cannot attach the property.
Vasilion v. Vasilion,
A.
Cordova first contends that the exemption of the home from the bankruptcy estate under § 522(b)(2)(B) survived the post-petition divorce decree awarding Cordova the fee simple interest in the home. The parties do not dispute that the entry of Cordova’s divorce decree extinguished the tenancy by the entirety, see Va.Code Ann. § 20-111, or that Cordova acquired sole ownership of the home in fee simple under the divorce decree. However, whereas Mayer asserts that the decree terminated the property’s exempt status, Cordova urges us to hold that the exemption of her property interest in the home was determined on the date her bankruptcy petition was filed and that the post-petition entry of the divorce decree did not affect the applicability of the exemption.
To support her argument, Cordova relies primarily on our decision in
BancOhio National Bank v. Walters (In re Walters),
Contrary to Cordova’s reading of
In re Walters,
our holding in that case was not a sweeping statement that subsequent events never affect the applicability of exemptions under the bankruptcy code. Rather, we stated that “[t]he proceeds derived from[life insurance] policies ‘owned by the debtor and
Moreover, Cordova presents us with no compelling reason to hold that the § 522(b)(2)(B) exemption with respect to her creditors’ claims continued to apply despite the termination of her tenancy-by-the-entirety interest. To the contrary, we recently held in
In re Ballard
that joint and non-joint creditors were entitled to share in property that the debtor held as a tenant by the entirety at the commencement of a bankruptcy case, because the property had devolved to the debtor’s sole ownership upon the post-petition death of the debtor’s spouse.
3
In re Ballard,
This reasoning counsels us to hold that the post-petition entry of Cordova’s divorce decree within 180 days of the filing of the bankruptcy petition renders the § 522(b)(2)(B) exemption inapplicable. Under Virginia law, non-joint creditors of a tenant by the entirety have no greater rights in the debtor’s interest than the debtor has.
See Vasilion,
Finally, we note that our view is supported by the opinions of other courts that have touched upon this issue and have suggested that postpetition changes in property ownership may affect the exempt status of the property.
See Massie v. Yamrose,
B.
Cordova next contends that even if she is no longer entitled to the entireties exemption under § 522(b)(2)(B), she obtained no new property interest as a result of the entry of her divorce decree that could enter the bankruptcy estate by operation of § 541(a)(5)(B).
5
Cordova first points out that, before the divorce, she held a fee simple interest in the marital home as a tenant by the entirety.
See, e.g., In re Black,
Cordova bases her argument on an improperly narrow construction of the term “interest” as used in § 541(a). Only by positing that interest as used in that section means “estate in land” can Cordova contend that she held an equal or lesser interest in the property after the entry of the divorce decree. Under that theory, Cordova held the same estate in land, a fee simple absolute, both before and after the divorce— albeit in the form of a tenancy by the entirety before the decree and sole ownership after the decree.
The construction of the term “interest” urged by Cordova contravenes a basic tenet of bankruptcy law that the bankruptcy estate defined in § 541(a) is “broad and all-embracing.”
Sachs v. Ryan (In re Ryan),
Having observed that the definition of the term “interest” as used in § 541(a) is significantly broader than that implied by Cordova, we conclude that Cordova’s sole ownership of a fee simple interest is a separate property interest distinct from the tenancy-by-the-entirety interest that she previously held. The interests are distinct because of the greater variety of rights vested in Cordova as the sole owner of the property. As the district court noted, after the entry of the divorce decree, Cordova
[could] sell, convey, give or encumber the property without the consent or joinder of her former spouse. She[could] direct the disposition of the property in a will. She [was] solely entitled to occupy, rent and sell the property and was solely entitled to all rents and profits from the property.
(J.A. at 154.) In contrast, as a tenant by the entirety, Cordova’s power to dispose of the property was much more limited.
See, e.g., Vasilion,
We conclude that § 541(a)(5)(B) thus operates to include Cordova’s fee simple interest in the bankruptcy estate. If Cordova had held that interest when she filed her bankruptcy petition, the interest would have been included in her bankruptcy estate, assuming no exemption applied.
See
11 U.S.C.A. § 541(a)(1) (stating that the bankruptcy estate comprises “all legal or equitable interests of the debtor in property as of the commencement of the case”). Because she acquired the fee simple interest as a result of the entry of a divorce decree within 180 days of the filing of her petition, it became part of the bankruptcy estate.
6
See
11 U.S.C.A. § 541(a)(5)(B);
In re Sivley,
III.
For the foregoing reasons, we conclude that the bankruptcy court did not err in sustaining Mayer’s objection to the exemption Cordova claimed under § 522(b)(2)(B) and ruling that the interest entered the bankruptcy estate under § 541(a)(5)(B).
Thus, we affirm the decision of the district court.
AFFIRMED.
Notes
. When we refer to Cordova’s fee simple interest in the home after the divorce, we mean her sole ownership of the real property, together with all improvements and fixtures thereon, as distinguished from her prior concurrent interest in the fee simple as a tenant by the entirely.
. In her brief, Cordova cites a number of cases that simply do not support her argument that post-petition events cannot affect a debtor’s § 522(b)(2)(B) exemption. Specifically, Cordova cites
Massie v. Yamrose,
. In In re Ballard, we found that the bankruptcy estate acquired the property "after the commencement of the case” under 11 U.S.C.A. § 541(a)(7) (West Supp.1995), which does not impose the 180-day limitation found in § 541(a)(5)(B) at issue in Cordova's case.
. Rather than claiming an exemption of entire-ties property under § 522(b)(2)(B) as Cordova does, the debtor in In re Ballard sought to avoid claims by non-joint creditors under a "general rule that entireties property under Virginia law is available for bankruptcy administration solely for the benefit of joint creditors." Id. at 371. The closely analogous reasoning of In re Ballard applies with equal force to Cordova's case.
. In pertinent part, 11 U.S.C.A. § 541(a)(5)(B) provides that the bankruptcy estate includes
[a]ny interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date ... as a result of a ... final divorce decree.
. In her brief, Cordova urges us to adopt the reasoning of
Ames v. Wickham (In re Wickham),