April 06, 2021
Summary: Have a debt collector with a judgment against you? Find out if they'll be able to take money out of your wife's bank account for the debts you owe.
If a creditor files a debt collection lawsuit and obtains a judgment against you, the creditor may attempt to retrieve repayment for the outstanding debt by garnishing your wages and/or seizing funds in your checking account. A common question asked by individuals who find themselves in this situation is: “Can a creditor access my wife's bank account to retrieve funds to pay for my debt?” The answer is… it depends.
The ability of a creditor, or debt collection agency, to garnish your spouse's bank account depends on multiple factors, including the type of account your spouse uses, the nature of the debt, and the state in which you and your spouse reside.
As a general rule, if your spouse has a separate checking account held solely in their name, then a creditor who obtains a judgment against you cannot get a garnishment order to access your spouse's account. However, the answer is different if you and your spouse have funds in a joint checking account.
If you have a joint checking account with your spouse, the ability of a creditor to access that account to satisfy a debt collection judgment depends primarily on whether you and your spouse reside in a common law state or community property state. Let's take a look at each.
If you and your wife reside in a community property state, then there is a legitimate risk that a creditor will be able to access a joint bank account to garnish funds to pay a debt only you owe. This is because community property states have laws on the books that treat the property of one spouse in a marriage as the property of the other spouse. Fortunately, most states do not adhere to community property laws. There are currently only nine community property states in America:
If you reside in a community property state, there are steps you can take to protect your wife and her funds from a garnishment effort sought by your creditors. Specifically, you should maintain separate, independent bank accounts instead of having all your funds in a joint bank account.
Though, it is important to note simply maintaining funds in separate accounts is not a foolproof method to protect your wife's funds. This is because, in many community property states, there are laws on the books that enable a creditor to enforce a judgment by accessing a spouse's bank account since the debt was incurred when you were married and, as a result, the funds in your wife's account are deemed “community debts.”
In contrast to community property states, individuals who reside in common law property states enjoy greater protections from creditor garnishments for funds maintained in a joint bank account. In a common law property state, the general rule is that the debt of each spouse remains their separate responsibility.
However, this general rule is subject to two important exceptions. First, if the debt benefited both spouses, then it may be possible for the creditor to garnish funds maintained in a joint account. Second, if both spouses took out the debt jointly and a judgment was subsequently obtained by a creditor, it exposes the joint account to garnishment.
It is important to note that even if a creditor secures a garnishment order and has frozen your joint bank account, some funds are protected and cannot be garnished. For example, any funds deposited into the account that are federal benefits (e.g., Social Security disability benefits, Supplemental Security Income, or federal retirement benefits) cannot be garnished by a creditor.
As a general rule, if your wife has a separate bank account held solely in their name, then a creditor cannot access that account to garnish funds to pay for your debt. However, if you and your wife have a joint bank account, there is a risk that a creditor could garnish funds in the joint account, even if a judgment is only entered against you. Nevertheless, the ability of a creditor to garnish a joint bank account will be impacted by the state in which you reside and the funds maintained in that account.
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Here's a list of guides for other states.
Being sued by a different debt collector? We're making guides on how to beat each one.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.