Can a Creditor Garnish Joint Bank Accounts in Texas?
- Texas is a community property state. This means that under the law, all property acquired during a marriage is considered to be jointly and equally owned by each spouse. This law applies not only to real and personal property but to other assets including bank accounts. The community property rules also apply to any debts incurred during the marriage, meaning that spouses share liability. Essentially, this means that a creditor can pursue a garnishment against a joint account regardless of whether the liability for the debt is incurred by one or both of you. If you and your spouse also have individual accounts, these accounts are not subject to garnishment for the debts of the other spouse.
- Under federal law, certain funds are exempt from seizure in Texas, regardless of whether they are held in a joint or individual bank account. The types of funds that are considered exempt include Social Security benefits, veterans' benefits, annuities and pensions received under the Railroad Retirement Act, civil service retirement benefits, foreign service retirement and disability payments, military survivors' benefits, benefits paid to government employees for injuries related to disability or death, death and disability payments received under the Longshoreman's and Harbor Worker's Compensation Act and any compensation related to the injury, detainment or death of individuals employed by U.S. contractors in established war zones. In addition, state law prohibits the garnishment of funds received from child support, alimony or other support obligations.
- If you believe any funds held in a joint account qualify as exempt, you must notify the court within 30 days of receiving notice that a garnishment is pending. You will also need to provide supporting documentation as evidence of your claim. Acceptable forms of evidence would include pay stubs or direct deposit receipts. If you cannot provide legitimate proof of exempt status of assets, the garnishment order will stand and the bank will be legally obligated to turn over your assets to the creditor.
- If your account lacks sufficient funds to satisfy a judgment, your creditor may pursue other means of collecting the debt, including placing a lien against any real property you may own. Essentially, this means that in order to sell the property, you will have to satisfy the lien before the title can be transferred to a new owner. Under Texas law, judgments are good for 10 years. This means that if you lack sufficient assets at the time a garnishment order is issued, the creditor still has a 10-year period in which they may attempt to collect the judgment.
