A joint bank account is an account that is shared by two or more people. This type of account is often used by married couples and adult children.
What Happens When a Creditor Tries to Garnish a Joint Bank
Joint accounts are especially useful in certain situations. For instance, if one person files for bankruptcy, the money in the account can be considered an asset. The account can be released if proof is presented.
Can Creditors Take Funds in a Joint Account? One of the most effective ways for a creditor to collect a judgment is through a bank account levy. The levy is when a creditor asks for a court order to take money from your account.
If you own a joint account, the levy can be a huge amount of money. When you receive a levy, you can file an objection and respond with your own bank statements. Your bank statements will prove that the money is not yours.
In some states, creditors can only garnish half of the funds in your joint account. However, in other states, creditors can take all of the money in your account. As with any other type of account, the laws vary.
There are many exemptions from the levy, including Social Security income, veterans’ benefits, and railroad retirement benefits. You may also be exempt from a levy if you can prove that you made traceable contributions to your joint account.
Some states require that a joint account holder file an affidavit with their bank. The affidavit must be signed by the account holder and provide information about the funds in their account.