Married Couples and Bank Garnishment – Can Your Spouse’s Bank Be Garnished for Your Debt? - The Law Offices of Paul Y. Lee (2024)

FAQs

Married Couples and Bank Garnishment – Can Your Spouse’s Bank Be Garnished for Your Debt? - The Law Offices of Paul Y. Lee? ›

As a result, it is possible for a creditor to garnish a spouse's bank account if their spouse owes a debt. It is difficult enough to have any bank account garnished, but when it is for your spouse's debt, it can be even more difficult to accept.

a judgment creditor of your spouse can garnish your joint accounts, and. if you have your own separate bank account and a judgment is taken against your spouse, that creditor can also garnish your separate account to pay for your spouse's debt.

Learn about your rights. Creditors might be able to garnish a bank account (also referred to as "levying" the funds in a bank account) that you own jointly with someone else who isn't your spouse. A creditor can take money from your joint savings or checking account even if you don't owe the debt.

A debt collector can contact your spouse. A debt collector can contact your parents or guardian if you are under 18 years old or live with them. A debt collector can also contact your attorney and, if otherwise allowed by law, credit reporting companies (Equifax, Experian, and TransUnion) about your debt.

Creditors can take money from any account that has your name on it. Creditors cannot take money from your joint accounts if the money belongs to another owner of the account (like your spouse or business partner). Exempt income. Certain types of income are exempt, meaning that the creditor isn't allowed to take it.

You can protect yourself from your spouse's debt by signing a prenuptial agreement before you get married and avoid taking out joint credit. It's especially important to protect equity in your home during a divorce to ensure you get your fair share, since this is likely the largest asset you have.

Some sources of income are considered protected in account garnishment, including: Social Security, and other government benefits or payments. Funds received for child support or alimony (spousal support) Workers' compensation payments.

Best Protection: Asset Protection Trust

Another option to protect your bank account from creditors is setting up a trust. There are a lot of different kinds of trusts out there, with the main categories being revocable and irrevocable.

What States Prohibit Bank Garnishment? Bank garnishment is legal in all 50 states. However, four states prohibit wage garnishment for consumer debts. According to Debt.org, those states are Texas, South Carolina, Pennsylvania, and North Carolina.

California is a Community Property State

As a result, it is possible for a creditor to garnish a spouse's bank account if their spouse owes a debt. It is difficult enough to have any bank account garnished, but when it is for your spouse's debt, it can be even more difficult to accept.

Can I be forced to pay my spouse's debt? ›

Don't assume you have to pay

You are generally not responsible for someone else's debt. When someone dies with an unpaid debt, if the debt needs to be paid, it should be paid from any money or property they left behind according to state law. This is called their estate.

Most states use common law (also known as equitable distribution), which dictates that married couples don't automatically share personal property legally. In other words, you aren't responsible for your spouse's debt unless you took it out together as a joint account, or you cosigned on it.

The Judgment Creditor may make a MOTION FOR AN ORDER TO GARNISH NON-DEBTOR SPOUSE'S WAGES to the court where the Judgment is entered. THIS MUST BE A NOTICED MOTION. [CCP 706.109].

In Ohio, a debt collector may only garnish up to 25% of your non-exempt wages and must leave at least $425 in your bank account. They also may not seize a vehicle worth less than $3,225. Better yet, the law protects $125,000 in home equity from creditors and $10,775 in aggregate value of household goods.

Joint Bank Account Levies

It doesn't matter whose funds were placed into the account. Under the Internal Revenue Manual, the IRS levy can attach to a bank account for which the taxpayer has an unrestricted right to withdraw funds, regardless of who deposited those funds.

Ohio law allows debtors to protect $425 in their account from garnishment (and $900 for joint account owners). This means that up to $425 in the account cannot be touched by the creditor. Once the garnishment has taken place, the tenant will most likely close the account or not deposit further monies into it.

Creditors may garnish a bank account or levy the funds in an account you jointly own with someone other than your spouse. Even if you don't owe the debt, creditors can take money from your joint savings or checking accounts.

You are generally not responsible for someone else's debt. When someone dies with an unpaid debt, if the debt needs to be paid, it should be paid from any money or property they left behind according to state law.

If they've taken debt out in their name only, you won't be responsible for paying it back. If you take on joint debt with your spouse, however, then you may be liable if they're not able to keep up with their part of the repayment.

The bottom line. You are generally not responsible for your spouse's credit card debt unless you are a co-signer for the card or it is a joint account. However, state laws vary and divorce or the death of your spouse could also impact your liability for this debt.