Can You Place a Lien on a Joint Account?

A joint bank account is convenient for many purposes, but it also can cause problems if one account holder has a collections judgment against him. Whether a person has a joint bank account or is a creditor seeking to collect on a judgment, it is important to understand the process of placing a lien on a joint bank account to be able to protect his rights.

Joint Bank Account Ownership

A joint bank account is an account wholly owned by each of the persons on the account. This means either person can use the full amount of money in the account for any purpose without consent of the other. However, if a creditor has a judgment against one of the account owners, the creditor with the judgment can place a lien against the joint bank account in an effort to collect on that judgment.

Bank Account Lien

A lien on a bank account freezes the money in the account, up to the total amount of the lien. For example, if a creditor places a $1,500 lien against a bank account with $2,000 in it, the bank will freeze $1,500 and only allow the account holder(s) to use $500 of the money in the account. The bank holds the money for a period of time that varies by state, but is generally a few weeks to a month. Once the bank freezes the money in the account, the creditor may levy the money in the account. A levy requires the bank to send the money to the creditor, generally through the court or county sheriff, to satisfy the debt. Laws vary by state, but generally a lien will not freeze deposits placed into the account after the creditor places the lien.

Appealing the Lien

The purpose of the waiting period between the placement of the lien and the release of funds to the creditor is to allow the account holder time to appeal the lien. In the case of a joint account, the account holder not subject to the lien may go to court to prove that the seized money belongs to her and not the person with the judgment. Proving this is difficult, but if all or the majority of the deposits came from the account holder without a judgment, an appeal may be successful.

Exempt Income

Though laws vary by state, most states exempt some forms of income from a bank lien. Commonly exempted funds include deposits from child support, Social Security, unemployment and veterans' benefits and other government programs. Some states also exempt all account balances below a specific level. For example, in New York, creditors cannot levy any money if the account balance is below $1,740. For more information on what sources of income are exempt, a person should contact the court that issued the bank lien.