Many people share a bank account with a spouse or other loved one. A joint account can make record keeping easier and provide convenient access to funds. But if you share a joint bank account with someone, and a court enters a monetary judgment against that person, the bank account could be garnished and all the funds in the account temporarily frozen.
Judgment Procedure
Before anyone can garnish your bank account, a judgment must be obtained against one of the account holders. In order to obtain a judgment, the creditor must file, and win a lawsuit in most cases. The federal government is the exception to the rule requiring the filing of a lawsuit prior to garnishment. You must be legally served with notification of the pending lawsuit before a judgment can be entered against you. Failure to defend the lawsuit can result in a default judgment being entered against you.
Garnishment Procedure
Once a creditor has successfully litigated the lawsuit, the court will enter the judgment in the court records. State procedures vary with regard to how the creditor can proceed to collect on the judgment, but most states include the option to request a wage or bank account garnishment. Typically, the creditor must return to court and ask the court to order a bank account garnishment. If approved, the court will send the order to the financial institution where you have funds on deposit. The bank is legally required to freeze your account. You cannot withdraw funds at that point, and any outstanding checks or automatic payments will not be honored.
Can A Joint Account Be Garnished?
Individual state laws determine the rules and procedures that govern garnishment of bank accounts. In many states, a joint bank account is subject to garnishment if one of the account holders has a judgment against her. In other words, if you share a bank account with your spouse, or another person, a creditor may be legally entitled to request a garnishment of the account. Obtaining an order for garnishment does not, however, necessarily mean the funds will be removed from the account.
Recourse
If you share a joint bank account with another person, and the account has been garnished, you may have a legal recourse to prevent the funds from actually being removed from the account. In most cases, the bank is only required to freeze the funds, pending a court determination whether or not the funds are legally available for garnishment. You should receive notice of the garnishment, and instructions on how to object to the garnishment and a date to appear for a court hearing. If all, or a portion, of the funds held in the account are yours, and the garnishment order is for the co-owner of the account, then you may be able to provide proof of the source of the funds to prevent the funds from actually being removed from the account. Consult your state laws, or with an attorney, to be certain.
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