Bank account question

[dman]

Got a question.

I have a checking account in my name only.

My wife has her paycheck direct deposited into my checking account.

If a creditor comes after her, what are the odds that they would be allowed access to a checking account that is not in her name?

If the odds are good that they would, would it help if I opened another account (again in my name only) and immediately transferred the funds to it each payday? Then the creditor would have to get the checking info at bank #1 from her employer, and then get the checking info at bank #2 from bank #1. More importantly, while she earned the money, it'd be in an account in my name only (we don't live in a community property state).

Another related question. If I default on a credit card with the same bank that I have a checking account, I know they could take the money (we'll say this is bank #0, as I plan on not using the account anymore). Could they come after the money in bank #1 if I ever transferred money between bank #0 and #1? Or rather, could they surprise me with that (i.e. no judgement or other notice and I simply wake up one day with the account at bank #1 wiped out)?

Just want to hold onto the money long enough for permitted expenses while we wait to file for bankruptcy.

Thanks!

[keepinitreal]

Don't forget about the possibility of the creditor garnisheeing your wife's paycheck before it goes into your checking account.

That does seem like a good idea to have your spouse's check direct-deposited into your account.

[dman]

Don't forget about the possibility of the creditor garnisheeing your wife's paycheck before it goes into your checking account.

That does seem like a good idea to have your spouse's check direct-deposited into your account.

Good point. I neglected to mention that my wife's contract with her current employer will be up in August. We wouldn't hit the 30-day late mark with anyone until after she receives her last paycheck. Garnishment is not a concern.

[treehugger1]

Why keep any of the "older" players? Open a new account that has no connection with the finances of your past and start a new financial life.

Any garnishment will take time as there first needs to be a judgment. It is possible that a bank could try to take funds from an account of yours or hers that they know about. Maybe not legal, but stranger things have happened. Be proactive and move away from your financial past.

[dman]

Why keep any of the "older" players? Open a new account that has no connection with the finances of your past and start a new financial life.

Any garnishment will take time as there first needs to be a judgment. It is possible that a bank could try to take funds from an account of yours or hers that they know about. Maybe not legal, but stranger things have happened. Be proactive and move away from your financial past.

Just want to make sure I understand.

Bank #0 which we currently have (about to transfer the money out of it today) will be out of the picture by the end of the month. I'm not sure whether I should keep it open simply for easy access to previous statements (when we closed a previous account due to them starting to charge a monthly fee, we lost all online access to previous statements). Definitely won't let money sit there.

Bank #1 was opened up 2-3 weeks ago (just got the PIN number yesterday). I'm transferring the funds from #0 to #1. I'll initiate from #1, so it'll be pulled (not pushed) from #0. Not sure if that matters. It will also receive direct deposits from my wife's employer. Bank #0 will know about #1, and so will my wife's employer. Anyone trying to take funds from bank #1 would have to find out the info from her employer, or from bank #0. Maybe a low risk, maybe not.

Bank #2 doesn't exist yet (or rather, I have no account with them at this point). If I open an account with bank #2, then the only way anyone would know about it, would be to find out from bank #1 (or the Chex System, if they search under my name). This bank would be a very regional bank, i.e. it only operates in the state we are currently in (which we are only in temporarily; we don't reside here). Could be a bit hard to get access to the funds all at once, with no physical branch in our home state. But if it's even harder for a creditor to get hold of, might be worth it.

[nervous1]

I have 2 cking accounts with 2 diff. banks and have a cc with both of them. ((I have decided to stop all cc pmts. this month.)

Last week I opened up a brand new cking accout at a bank that I have never any business with.....and have made transfers (through paper check and online transfer) from the previous banks.

Are you saying that one of the cc's can pull $$$ from my NEW account? That's pretty bizarre and, frankly, seems illegal.

[VirginiaGuy]

Are you saying that one of the cc's can pull $$$ from my NEW account? That's pretty bizarre and, frankly, seems illegal.

Yes. The cc that you stop paying can sue you (generally takes at least a few months for this to happen) and then once it gets a judgment, it will communicate with the banks in your area until it finds yours. At that point, it will get a writ of execution and give it to the sheriff who will take it to the bank and basically drain your account in order to satisfy the judgment.

A lot of people have suggested using an online bank, since most are based in the middle of nowhere, which makes it harder for creditors to find out about them.

[nervous1]

Yes. The cc that you stop paying can sue you (generally takes at least a few months for this to happen) and then once it gets a judgment, it will communicate with the banks in your area until it finds yours. At that point, it will get a writ of execution and give it to the sheriff who will take it to the bank and basically drain your account in order to satisfy the judgment.

A lot of people have suggested using an online bank, since most are based in the middle of nowhere, which makes it harder for creditors to find out about them.

OK...I knew that, but is it possible that the cc could take $$ from my new account before taking legal action? I opened it because I figured they would try to take it from their "own" bank.

Also...I JUST stopped paying. The majority of my cards are not even late yet, so if I plan to file anywhere from 90 days on, I should be safe from a judgement, you think?

[VirginiaGuy]

OK...I knew that, but is it possible that the cc could take $$ from my new account before taking legal action? I opened it because I figured they would try to take it from their "own" bank.

Also...I JUST stopped paying. The majority of my cards are not even late yet, so if I plan to file anywhere from 90 days on, I should be safe from a judgement, you think?

You'll be fine for 90 days.

It would be illegal for them to touch your old account too until they got a judgment.

Some states do have a prejudgment attachment of assets that creditors can petition the court for, which is essentially a freeze of all your assets until they can adjudicate you lest you run off with them. But these are very rare and seem to be granted by courts in extreme circumstances. You might want to check your state's statutes to see if prejudgment attachment is ever allowed.