Can my joint bank account be garnished?

Recently on our legal forum a user asked, “I have been married for five years. I have a joint bank account with my husband. He has spent unsightly amounts of money on furniture, clothing and jewelry over the last several years, never repaying the credit card companies. Recently we were sued and the credit card company won a judgment against us. Now they are trying to take money from our joint bank account. If my name is on the account can they legally take my money?”

What is a joint bank account?

A joint bank account is a bank account which is shared by two or more people. Although the most common type of joint bank account is between spouses or significant others, joint bank accounts can also be used between other relatives and business partners.

Spouses and significant others generally have a joint tenancy account while business partners generally have a tenants-in-common account. For this discussion we’re going to assume you and your husband have a joint tenancy account which means that you and your husband share in the rights and liabilities of the account and either party can withdraw or deposit money with only one signature.

Can my joint bank account be garnished?

Creditors have several legal means to pursue past due payments from you. One of the most useful tools is to file a lawsuit against you and have the court issue a judgment. If the creditor receives the judgment they can pursue a bank account garnishment.  

Prior to the enforcement of the garnishment, however, the creditor is required to give information to the bank about their legal right to garnish the funds. After the bank receives the proper legal documentation from the creditor they are legally required to garnish the money from your account and give it to the creditor.

Am I always liable for my spouse’s debts?

Whether or not you are liable for your spouse’s debts generally depends on the state in which you live and whether that state is a community property state or a common law property state. 

For example, if you live in a community property state the debts you incur during the marriage are owed by both spouses. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

In common law property state, however, debts of your spouse may remain their responsibility. Exceptions may exist, however, if you and your husband accumulated the debts together or you and your husband both benefited from the debt.

Additionally, assuming the debt is not owed as tenants by the entirety, monies in a joint bank account may be garnished by the creditor. In some states, however, creditors may be limited in the amount they can garnish (i.e. state law may limit the garnishment to half of the balance).

In other states the creditor will be barred from garnishing the account unless there is evidence that you benefited from the debt.

Are there funds that are protected from garnishment?

Yes, certain assets and monies may be exempted from garnishment. For example, monies which were part of a gift or inheritance or other sources of income, including SSI income, may be exempted.

Note: Monies such as SSI are actually protected under federal law from garnishment and accounts where this money is deposited or transferred may be protected from garnishment. 

Bottom line:

Whether or not creditors can garnish joint bank accounts will depend on the state in which you live, the type of debt, what monies are deposited in the account, and a variety of other factors.

If you believe your money should not be garnished you can file an exemption with the court stating that although this is a joint account a certain portion of the money which belongs to you came from an exempted source.