Hi,
I’m an adult with a joint checking account that I opened with my mother when I was a minor. She recently lost a court case with her small business and now owns money. I’ve been using that joint account for automatic work paycheck deposit and then regularly transferred funds into a savings account that is only under my name. My entire savings are in this personal saving account which was accumulated in this order :
work paycheck -> joint checking account -> personal savings
I now want to protect my income and personal assets in case her creditors or bankruptcy proceedings try to claim funds that were deposited into or transferred through that joint account. I’ve removed most of the money already to the savings account within the same bank and that only has my name and I’ve removed her name from joint account.
However, because the money was transferred from my joint checking account to my personal savings account for the past 5 years, would collectors still able to seize the money out of my savings or can try to collect it? There’s obviously a trail since they’re both in same bank.
What would be the steps that I should take? Would I open checking account another bank and move my entire savings to a different bank?
Additionally, should I close the joint checking account even if I just removed my mom today? I don’t know if my account balance can go negative.
Any advice would be really appreciated as my mom can’t afford any legal services (low income) and I’ve worked so hard to have my current savings.
Location: CA
Comments
When a credit is trying to enforce the judgment they send the bank an order and the bank matches every account it has for that person. That would include the joint account. To stop money being taken from that account, it would be up to you to show that it’s not really joint and you only have an individual interest in it and it’s not your mother’s money. The bank will charge big fees for having to deal with a levy (you can see them on the fee schedule), so closing the account might be practical to avoid that.
The levy order wouldn’t match your individual account. The creditor can do things like make the bank or your mother say where else money from her accounts was being is being transferred to. This is less common. But then they could try to collect from you as if you were a third person holding your mother’s money—in that case they would have to prove that it’s really hers and not yours.