Is a Joint Account Holder at a Bank Responsible for Other Debts?

A joint account holder at a bank may be unclear as to the relationship between his account and the other account holder's debt. The result sometimes is financial difficulty and conflict between the account holders. Familiarizing yourself with debt law for your region may prevent these problems and keep you from being caught off guard.

Separate Vs. Community Property States

Most states are separate property states. This means that each person is responsible for his own debt. Under these regulations, a creditor typically cannot claim a husband's assets to cover his wife's debt and vice versa. However, some states recognize community property where partners are treated as one functioning financial entity. Under these rules, a creditor can easily take money from a joint account to cover one of the account holder's debts.

Due Process

Creditors usually have to show due process before they take money from a bank account, joint or otherwise. This means they have to go to court and get a judgment that entitles them to your bank account funds. During this process, anyone listed on the joint account has the right to show what money in the account is theirs. If you live in a separate property state, you can bring this evidence to the judge so that the funds in the account that belong to you are exempted in the judgment. If you do not do this, the creditor may be able to take most of the money in the account as there is no distinction between the debtor's funds and yours. Usually, you have two to three months to file an exemption objection.

Exempted Monies

Certain monies automatically are considered exempt from a debt judgment. These include funds social security benefits. However, you'll need to be able to show that the funds in the account qualify for exemption. For example, you can bring a copy of your Social Security award letter to the hearing. If a creditor garnishes funds from the account that are exempt, you can petition the court to have the creditor return the funds to you.

Considerations

Having a joint bank account affords much in terms of convenience. However, it generally is safer to keep finances separate as individual accounts clearly establish ownership of funds and most states recognize separate property. If you are in a position where you fear the stability of your joint funds, talk with the other account holder and see what you can do to untangle your monies.