Can a Debtor Garnish a Joint Bank Account?

If a person holds money in a joint account, the other owner listed on the account is a co-owner of the account balance. Either party can withdraw all of the money in the account without notifying the other unless special arrangements are made. This co-ownership of the account can cause problems when one of the owners faces financial trouble and creditors trying to collect money he owes.

Debtor Listed

If a creditor has a judgment and a garnishment order against an individual debtor, the creditor can attach the balance in any bank account that has the debtor listed as an owner, either as an individual or a joint account. The creditor usually locates the account by performing an asset search under the debtor's name. When the creditor notifies the bank of the attachment or garnishment order, the bank must turn the funds over to the creditor after a waiting period of 30 days. If the bank does not do this, it can be found liable for the entire amount of the unpaid debt.

Exempt Income in Account

Certain types of income are exempt from seizure in a garnishment or attachment. Federal disability benefits and federal retirement benefits are exempt from collection by creditors, as are child support and alimony. If a joint bank account has income that the debtor received from exempt sources, the money that came from these sources cannot be taken by attachment or garnishment.

Receiving an Exemption

Creditors do not know the source of the money in the joint account. If the account contains money that is exempt or belongs to an account holder that is not liable for the debt, the account holder can ask a judge for an exemption from garnishment. The account holder should petition the court for exemption during the 30-day waiting period before the money is turned over to the collector, but the court can also force the creditor to give back money after the bank turns it over. It is up to the debtor to prove the source of the income and that it should not be garnished.

Prevention

If a debtor is listed on a joint account, and is expecting a garnishment to be executed against him, he should remove his name from any joint account to prevent a garnishment of money that does not belong to him. If all that a debtor has is exempt income, he should notify the court and the creditor in advance, so that the creditor doesn't attempt to garnish exempt income.