child support affecting new spouse freezing checking acct

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Latest post 02-17-2012 10:01 PM by Drew. 9 replies.
  • 02-17-2012 12:27 AM

    child support affecting new spouse freezing checking acct

    i have a question.. here it goes.. my new wife and i have a shared checking account and it shows what money goes in for me as well as my new wife .. they froze our checking account but she is the money maker is she liable for my child support in florida.. also they take half my pay check and took all of our tax return .. my new wife is going to file injured spouse but was wondering about the money she has direct deposit on as well as mine... i know i owe child support but my new wife shouldnt be liable for my debts,.. my question is this can they take her money even thou we have a joint account

  • 02-17-2012 1:04 AM In reply to

    Re: child support affecting new spouse freezing checking acct

    Absolutely. If you know you owe back support then any jointly owned accounts or property can be liened/siezed. Is there any reason why you are in arrears ? Your wife faces alot of problems by marrying a guy past due on support.

  • 02-17-2012 5:52 AM In reply to

    Re: child support affecting new spouse freezing checking acct

    Here's how this stuff works. When you owe a debt like a judgment, child support, or back taxes, the creditor may attach any property or income you have for the debts you owe. For this purpose, the creditor can "step into your shoes" meaning the creditor can exercise any rights that you have. Joint bank accounts are the property of both spouses and thus typically either spouse may take out all the funds in the account without the consent of the other spouse. Since you can take out all the funds, so can your creditor, even though it was your wife that put in the money. So, the common solution here would be to not have much money in a joint account; have her pay direct deposited into an account titled solely in her name.

    The big exception here would be if the account was owned as tenants by the entirety, a form of property ownership recognized by about half the states, including Florida. It is a form of ownership unique to husband and wife, and under that form of ownership neither spouse has an individual ownership interest in the property—instead, the property is owned by the marital unit. A creditor of just one of the spouses generally cannot attach tenancy by the entirety property to collect the debt (with the unique exception of the IRS, by virtue of a Supreme Court ruling a few years ago). Whether your account is held as tenants by the entirety I cannot say, but if it is, that would provide a defens against the attachment. You may need to get advice from a FL attorney to determine the form of ownership if it's not apparent from the account title itself.

  • 02-17-2012 7:44 AM In reply to

    • Drew
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    Re: child support affecting new spouse freezing checking acct

    In the future you and your wife adjust your withholding so as to not overwithhold  or overwithhold just a tiny amount....



  • 02-17-2012 7:52 AM In reply to

    • Drew
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    Re: child support affecting new spouse freezing checking acct

    By operation of FL law it is most likley that this is a TIC account in FL.

    This means that your wife has a 100% interest in the whole.  Has your wife gone to the bank and demanded access to all the funds she seeks?   Wife needs to get pushy on what basis the bank is denying her access to her funds!



  • 02-17-2012 8:02 AM In reply to

    • Drew
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    Re: child support affecting new spouse freezing checking acct

    Are you personally in FL?  To garnish FL paychecks is not common in FL as I understand it....

    Is it a multistate bank?

    Some suggest that accounts be moved to smaller banks with instate FL operations only.

     



  • 02-17-2012 6:42 PM In reply to

    • CJ
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    Re: child support affecting new spouse freezing checking acct

    This exact thing happened to us.  My husband was in arrears prior to us getting married.  We opened a joint account, I had direct deposit and they froze it. It was a pain in the you know what to prove what was mine.  Make it simple, you have your account and she has hers. If you need to be giving her money for things then you need to ask your employer for live checks, you go cash them and give cash to your wife to pay bills.  Now don't get me wrong, I'm NOT encouraging you to avoid paying what you obviously owe, but I know there is no mercey when it comes to the support department getting the CP's child support. Unfortunatly they don't care that you have bills and responsibilities too.  But I also suggest you pay those arrears back ASAP because the penalties add up faster that you can imagine.  My husband owed over $60k and it took us almost 6 years to pay it off. But it was his fault for not be responsible in the first place.

  • 02-17-2012 8:53 PM In reply to

    Re: child support affecting new spouse freezing checking acct

    Drew:
    By operation of FL law it is most likley that this is a TIC account in FL.

    No, not likely. The form of ownership will generally be specified in the bank documents setting up the account. Most banks set up joint accounts as joint tenants with a right of survivorship (JTWROS) and, in states that recognize tenancy by the entirety (TBE), will set up spouse accounts as TBE. If you want an account to be tenants-in-common (TIC) at most banks you have to specifically ask for it, and banks tend to be reluctant to do it even then for reasons I won't get into. If the account documents do not specify the type of title, then in most states that recognize TBE ownership, the default form of ownership is TBE. I don't know what Florida's default rule is, but I'd not be suprised that it too provides TBE as the default.

    Thus, it's likely that this account is a TBE account. If so, that would make the account exempt from attachment for the debts of just one spouse. I suspect that is the basis for Jsmitten-Esquire's statement that the creditor cannot attach the joint account. But the form of ownership should not be assumed—the poster should verify it first to know where they stand.

    Drew:
    This means that your wife has a 100% interest in the whole.  Has your wife gone to the bank and demanded access to all the funds she seeks?   Wife needs to get pushy on what basis the bank is denying her access to her funds!

    That won't work if the account was held TIC. If it was held as TIC, then unless Florida has a very unusual law, the attachment should be good. The fact that both owners of a TIC account share ownership of the whole account does not mean the account is immune from attachment for the debts of just one owner. What matters, as I said before, is that (1) the debtor has an ownership interest in the property and (2) the debtor has the right to take out all the funds on his own without consent from the co-owner. The creditor steps into the debtor's shoes and gets to pull the account funds out without the consent of the co-owner, too. It gets to exercise the rights that the debtor has to the property the debtor owns.

    Think of it this way. Amy and Barry, a married couple, have a joint bank account held either TBE or JTWROS in a non-community property state. Amy has put most of the money into the bank account. Barry goes in on Friday and takes out all the money. Amy goes into the bank on Monday and does what you suggest and demand the bank give her the money. She won't get it—the bank will tell her to pound sand since Barry already took out the money and there is nothing to get.

    Now, suppose Barry owes back child support from a previous marriage. The child support agency hits the bank account on Friday and takes out all the money in the account. Amy goes into the bank on Monday and demands "her" money. The bank will tell her to pound sand — the bank account doesn't have the funds in it anymore. The creditor, standing in the shoes of Barry, effectively exercised his right to take out the funds. Thus, the result is exactly the same from Amy's perspective as though Barry himself had taken out the money.

    The exception here, as I said, is if the account is held TBE instead. That unique form of ownership makes the account exempt from attachment because in the case of TBE property, Barry doesn't own an interest in the account like he would in a TIC or JTWROS account. The marital unit (i.e the two spouses together) owns the account, and the marital unit is not the debtor in the child support case.

    I'm very familiar with how this works as I attached many joint bank accounts in a number of states over my career at IRS. I was able to routinely hit joint accounts for the tax debts of just one account owner for accounts held TIC or JTWROS. I've seen many private creditors prevail in doing that, too.

    I could not do that with accounts held TBE. The Supreme Court later determined that as a matter of federal law the IRS could reach TBE accounts, too, for the debts of just one spouse. But that is a unique ruling that does not apply to any other type of obligation. Private creditors are still unable to hit TBE accounts for the debts of just one spouse. That's why how the account his held is very important.

  • 02-17-2012 10:01 PM In reply to

    • Drew
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    Re: child support affecting new spouse freezing checking acct

    Correction--Its most likley TBE in FL--

    double check the below for accuracy--several similar posts on line also as the account is not subject to garnishments  if just one holder  is a debtor.

     


    Joint Accounts in FL Presumed to be Tenancy by the Entireties



    Question: The Florida supreme court passed a law 10 months ago which states that any joint account with rights of survivorship held by a husband and wife is presumed to be Tenancy by the Entireties. My questions is, on our signature cards, it states that the ownership type is Joint (Right of Survivorship). Does this statement limit the account to Jt W/ROS without the Tennants by the Entireties, or does that still apply despite the statement?

    Answer: If your signature card does not mention tenancy by the entireties (most do not), Florida law now presumes a joint account held by husband and wife is a tenancy by the entireties. This is true regardless of what (if any) form of ownership was checked when the account was opened.

    Tenancy by the entireties is a form of ownership unique to husband and wife. It assumes they each own the asset simultaneously, not in divisible portions which can be impaired by one of them acting alone. In this case, the court found that the husband's judgment creditor was not entitled to any portion of the joint accounts held by husband and wife since the wife was not on the note. The effect on Florida consumers, and perhaps creditors, is dramatic.

    The name of the case is Beal Bank vs. Almand and Associates. The 38 page opinion was released on March 8, 2001 and can be found on the Florida courts' web site. The Florida Bankers Association circulated a memorandum to its membership regarding the case and I encourage you to obtain a copy.

    Your institution's counsel should review the case and decide what, if any, response is appropriate. The presumption is highly favorable to consumers. It may affect lending decisions. You may also consider whether it affects your methods for processing attachments or garnishments; e.g. do you need to record on the signature card whether the man and woman opening the joint account are married?



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