Joint bank accounts are accounts shared between two people with both of their names on it. These accounts are usually created by couples looking to combine their income in a way that allows them to collaboratively keep track of spending and finances. While joint bank accounts have their benefits, if a judge rules to garnish your wages, you and your co-account holder’s funds will be affected. This is so as creditors aren’t required to differentiate the funds in the account since both of your names are on it. This can be incredibly detrimental and irreversible.
In the eyes of the law, a joint bank account is seen to have one owner. Any actions made with that bank account are considered to be made jointly. This allows debt collectors to garnish wages from a joint bank account, as all individuals whose names are on the account are responsible for any account activity.
Types of Joint Bank Account
There are two separate types of joint banks: joint tenancy accounts and tenancy-in-common accounts. Joint tenancy accounts are most likely shared between family members and spouses while tenants-in-common accounts are likely opened by business partners. Joint tenancy accounts permit either account holder to withdraw funds from the account with a signature from either account holder. Tenants-in-common accounts require both parties to sign for withdrawals.
If you have a joint tenancy account, creditors or your co-owner’s creditors can garnish the bank account if they win the judgment. To legally garnish your account they must send a legal document to your bank detailing that they have legal rights to your funds. If this document is provided, the bank is required to release the funds.
Before this can take place, the court must give you a 30-day notice. It is during this time period when you can file for an exemption. The exemption can detail that the majority of the funds in the joint account belong to the co-account holder. This must be supported by the necessary documents which can be deposit slips or direct deposit receipts. If your request for exemption is denied, the co-account holder can remove their funds in the remaining time allowed before the wages are garnished.
Don’t allow this to happen to you. Debt collectors will only collect your personal information and will not offer any deals. Seek the counsel of the nonbankruptcy attorneys of Illinois at Benveniste Law Offices to settle your debt. We can negotiate with debt collectors to have your debt decreased with the most favorable terms for you. If your case requires a court appearance, we will show up on your behalf to dispute the claims presented against you. Contact us today at 1-800-497-5358 for a free consultation.