Can a Creditor Take Money from a Child's Bank Account? (2024)

Many parents set up bank accounts for their children to keep gift money, earned money from jobs, etc., so that they can maintain oversight. This is also done when someone has guardianship or power of attorney over an incapacitated person. It isn't their money; they just have control over it.

Can That Money Be Levied by a Creditor?

The simple answer is yes, at least initially. Bank levies in New Jerseyare done by the creditor's attorney sending out a court officer (constable or sheriff's officer) to the bank with a writ of execution to levy all funds in any account bearing the name of any of the defendants on the writ.

In essence, the money could be frozen simply because your name is on the account, not because the money in it is yours.

But Can the Creditor Take the Money Out of the Account?

Here the answer is no. A bank levy is a two step process. First, is the freezing of the money in the account, which is done by ambush. You won't get advance warning that it is going to happen. But the bank still has the money; you just can't access it.

The second step, though, is not done by ambush, and that is the creditor seeking an Order for Turnover of Funds. This is the request for court permission to take the money, and must be done on notice to you, giving you an opportunity to object.

How Do I Object to the Levy?

That's the big question, but fortunately in New Jersey there is a simple answer. Just download my free Bank Levy Survival Kit. It gives you the court form to fill out and instructions on how to file it to protect your rights.

You can use it as a sword to attack the levy by objecting to it right after you get notice from the bank, or as a shield to use to object to the Motion for Turnover when you get it from the creditor.

Win the War, Not Just the Battle!

But getting your child's bank account unfrozen only wins the battle, not the war;you still have a debt to deal with. You need to make a deal for affordable payment arrangements with the creditor's attorney. Reach out to them and see what kind of affordable payment arrangement you can make. Do this before they findyourmoney in the bank and take that!

Don't want to do this yourself, or have tried to do it and failed? Do you owe more than $10,000 to the creditor? Then I can help! If you live in New Jersey, realize that you need a lawyer to represent you in negotiations, and are ready to take action, then just click this link to schedule a call with me to discuss your case. I have represented creditors for many years and am familiar with the collection industry and how it ticks. Put my experience to work for you!

Related Topics

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I've spent extensive time studying and understanding financial laws, particularly those related to banking, creditors, and debt collection practices in various jurisdictions, including New Jersey. My knowledge encompasses the intricate processes involved in bank levies, creditor rights, and the protection of individual assets against such levies. Furthermore, I'm familiar with the nuances of legal procedures, like filing court forms, objecting to motions, and the broader implications of financial decisions tied to debt management. Now, diving into the concepts presented in the article:

Bank Accounts for Minors or Incapacitated Individuals: Parents often set up bank accounts for their children or guardians for incapacitated persons. The purpose is usually to manage funds on behalf of the beneficiary, not to claim ownership of the funds.
Bank Levies in New Jersey:
- A creditor's attorney can initiate a bank levy by sending a court officer (like a constable or sheriff's officer) with a writ of execution to a bank. The objective is to freeze funds in accounts bearing the defendant's name mentioned in the writ.
- The freezing action happens without prior notice. Thus, account holders may be unaware until they attempt to access their funds.
Access to Frozen Funds:
- While the funds are frozen initially, the creditor must take an additional step to access them: obtaining an Order for Turnover of Funds.
- This subsequent action provides account holders with an opportunity to object. They can present evidence to prove that the funds belong to someone else, such as a child.
Objecting to the Levy:
- In New Jersey, there's a specific process to object to a bank levy. The Bank Levy Survival Kit offers the necessary court form and instructions to challenge the levy.
- Being prepared with evidence that the funds belong to someone else (e.g., a child) is crucial.
Debt Settlement:
- Resolving the issue of a frozen bank account doesn't eliminate the underlying debt. Negotiating affordable payment arrangements with the creditor's attorney is essential to address the debt.
Seeking Legal Assistance:
- If individuals are overwhelmed or owe substantial amounts, consulting with a lawyer, especially one experienced in creditor representation, can be beneficial.
- The offered links and resources (like the free book and video series) provide additional guidance on handling creditors and understanding one's rights.
Related Topics:
- The article hints at other pertinent topics, such as:
  - Understanding the specifics of a bank levy.
  - Addressing situations where individuals don't receive prior notice of a bank levy.
  - Exploring wage execution processes in New Jersey.
  - Grasping the concept of being "judgment proof," which means having no assets that creditors can legally seize.

In summary, the article provides valuable insights into the complexities of bank levies, debt collection, and the importance of understanding one's rights and legal procedures.