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Enforcement of Judgment Against Bank Account

Question: My wife just had a judgment issued against her. She is receiving unemployment. Can the creditor freeze our joint bank account?

Answer: A creditor can attempt to enforce a judgment against any bank account on which the debtor’s name appears. Illinois presumes that money held in such an account is the property of the judgment debtor. Any other person whose name appears on the account is entitled to notice of the attempted enforcement and can come into court and prove who actually owns the money. They should have documentation of where the money came from. If, for example, you can show that 50% of the money in the account is yours, the creditor is not entitled to that 50%.

In addition, there is an exemption for unemployment benefits. Finally, there is a $4,000 “wildcard” exemption that applies to any property that a creditor is attempting to seize, including a bank account. For example, if there is $7,000 in the account, and you can show that half of it is yours, your wife is entitled to prevent seizure of the other $3,500 either by showing that it consists of unemployment benefits or by claiming the “wildcard” exemption.

Banks are now supposed to refrain from freezing accounts to the extent that they contain funds from exempt sources, such as Social Security benefits. It is nevertheless a good idea to have such exempt funds deposited into an account which contains only funds from exempt sources, to make proof of the exempt nature of the funds simple. For the same reason, if one spouse has serious debt problems, it is a good idea to keep the funds of each spouse in separate accounts.