Can a Collection Agency Go After a Spouse's Bank Account?

Although collection agencies prefer to collect consumer debts through voluntary payments, your collection agency may revert to a lawsuit if you do not agree or adhere to a payment plan. The collection agency then uses the civil judgment from the lawsuit to further its collection efforts against you and, in some cases, your spouse.

  1. Debt Liability

    • The Fair Debt Collection Practices Act (FDCPA) notes that a collection agency cannot inform a third-party about your debt. This includes your spouse. Thus, unless your spouse incurred the original debt, debt collectors cannot legally pursue him for the outstanding balance since doing so would require the company to notify your spouse of the existence of the debt and the amount owed via a court summons and complaint.

    Community Property States

    • If you live in a community property state, state law dictates that you and your spouse equally share all assets that you accrue as a couple over the course of your marriage. Although individual community property states differ, this often applies to debt as well.

      Even if you incurred the debt by yourself and your spouse is not aware of it, community property law identifies your spouse as a liable party. This gives a collection agency the right to notify her of the debt, file a lawsuit against her and garnish her bank accounts.

    Joint Bank Accounts

    • If, like many couples, you and your spouse share a bank account, your spouse could be subject to a bank account garnishment even if you do not live in a community property state. Each state maintains its own specific regulations concerning joint bank account garnishment. While some states only permit creditors to garnish half of the funds present in a joint bank account, others allow creditors to seize the account in its entirety.

      Your spouse has the right to file an exemption claim with your bank for any amount the federal government or your state deems “exempt” from debt collection. Federal exemptions include Social Security and other government benefits while state exemptions vary considerably. In New York, for example, if your spouse can prove that he only added your name to the joint bank account out of convenience, the entire bank balance is exempt from collection activity.

    Garnishment Threats

    • Do not assume that just because a debt collector threatens to garnish your spouse’s bank account that the company will actually do so. Such threats are often a scare tactic employed to frighten noncompliant debtors into paying off collection accounts.

      The FDCPA, however, does not permit collectors to threaten consumers with action they either do not intend to take or have no legal right to take. If a collection agency cannot legally seize your spouse’s bank account yet threatens to do so, you reserve the right to file suit against the collection agency for violating the FDCPA.

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