How Joint Bank Accounts Affect Garnishment

 Posted on December 06, 2019 in Debt Collection

When you receive a favorable judgment against a debtor in a lawsuit, you will have a variety of sources from which you can retrieve the debt owed to you. Many people hold a majority of their money in bank accounts, and you can use non-wage garnishment to access that money if the debtor has not been using it to repay you. When you receive a garnishment order from the court, the debtor or other interested parties have an opportunity to contest the order and protect that money. In some cases, a person who shares the account with the debtor may try to block your garnishment order.

Non-Wage Garnishment

First, let us review the rules of non-wage garnishment during debt collection. Non-wage garnishment is a court order to withdraw money from sources other than the debtor’s pay from work. Bank accounts and physical assets are the most common sources for non-wage garnishment and can potentially be more valuable than the debtor’s wages. However, there are restrictions on non-wage garnishment:

• The debtor has several exemptions to protect assets, including a $4,000 wild card exemption that can be used on any asset.
• Illinois law exempts money awarded to the debtor through a personal injury or workers’ compensation case.
• Illinois also exempts money in retirement and life insurance plans, unless the creditor can prove that the debtor created these accounts in bad faith in order to protect the money from garnishment.

Joint Accounts

The co-owner of a debtor’s bank account can stop a creditor from garnishing money from the account if a majority of the money came from them and not the debtor. The creditor bears the initial burden of proving that the account belongs to the debtor and should be eligible for garnishment. After the creditor proves this, the joint account holder is the one who must prove through deposit slips and receipts that they are the source of the majority of the money. Joint accounts are typically held between spouses or business partners, who in some cases may have debts that are not shared between each other.

Contact an Illinois Debt Collection Attorney

Even after winning a lawsuit against a debtor, your fight to collect the debt may continue. Debtors look for exceptions in the debt collection laws that will allow them to block or slow down your collection efforts. A Chicago debt collection lawyer at Dimand Walinski Law Offices, P.C., will follow through on your case until you have retrieved the money that is owed to you. To schedule a consultation, call 312-704-0771.

Source:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=073500050HArt.+XII+Pt.+8&ActID=2017&ChapterID=56&SeqStart=93100000&SeqEnd=95200000