In the 1990 case of Jeanne Farrey, FKA Jeanne Sanderfoot v. Gerald J. Sanderfoot, the U.S Supreme Court ruled on issues related to bankruptcy and property rights following a divorce. The couple had jointly owned a home which was awarded to Mr. Sanderfoot in their divorce settlement; he then filed for Chapter 7 bankruptcy and sought to void his ex-wife's lien against the house as part of that process. Mrs. Farrey argued that she still held an interest in the property because her lien predated his sole ownership. The court disagreed with Mrs.Farrey’s argument, ruling unanimously (9-0) in favor of Mr.Sanderfoot.The justices determined that when Mr.Sanderfoot received full title to the house after their divorce decree, it constituted a transfer of ownership from them as joint tenants into him individually - essentially creating "new" property at this point rather than simply transferring existing property rights.This new asset could therefore be included within his bankruptcy estate without violating any prior liens or claims by Mrs.Farrey. This decision clarified how courts should handle similar situations where one spouse seeks to discharge debts through bankruptcy following a division of marital assets during divorce proceedings.

In the dissenting opinion for Jeanne Farrey v. Gerald J. Sanderfoot, it was argued that the majority's decision failed to adequately consider the nature of property rights in a marriage and how they are affected by bankruptcy proceedings. The dissent contended that when a couple divorces, their joint interests in marital property do not simply disappear but rather transform into separate equitable interests which should be protected under bankruptcy law. They disagreed with the majority's view that Mr. Sanderfoot had created a new interest after his ex-wife filed for bankruptcy; instead, they believed he merely retained an existing interest from before her filing - one she could not discharge through bankruptcy because it did not belong solely to her at any point during or after their marriage.