When you owe a debt to a creditor in Arkansas, he may garnish your wages, remove money from your accounts or seize your personal property. However, you may wonder what happens when you share ownership of property, such as a checking account with another person. Depending on the circumstances, creditors may be able to remove funds from a joint checking account.
Garnishment
Before a creditor can garnish your wages in Arkansas, he must obtain a judgment and a writ of execution. A creditor can't garnish more than 25 percent of your income after payroll taxes. Even if multiple creditors are garnishing your income, the total amount seized can't exceed 25 percent of your income after payroll taxes. Creditors may garnish wages from your paycheck, or they may seize the funds from your checking account.
Exempt Income
Some types of income are exempt from garnishment by most creditors. Creditors can't garnish these funds even if you have already deposited them into your bank account. Exempt income in Arkansas includes Social Security benefits, pension payments, retirement benefits, welfare, unemployment insurance benefits, annuities, workers' compensation benefits and insurance benefits. In Arkansas, you have 20 days after receiving the writ of execution to file your exemptions with the court.
Joint Accounts
Arkansas law allows creditors with judgments to remove money from any checking account that lists you as owner. Even if the account has other listed owners, creditors can garnish the funds it holds. Arkansas considers the money in a checking account to be non-exempt personal property, so creditors can remove all of the funds even if doing so causes your account to become overdrawn.
Considerations
Though creditors can garnish the funds in a joint account, you may be able to prevent them from taking the other owner's money if you can provide the court with proof that the funds in the account don't belong to you, such as a direct deposit slip showing that the funds came from the other owner's employment. If a creditor continues to take another owner's money, that owner should stop depositing money into the account.
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