The IRS can always garnish your spouse's wages if you are married and filing jointly. The IRS can and likely will garnish both of your wages in that situation. If you and your spouse are married and filing separately, the IRS cannot garnish your spouse's wages.
California is a Community Property State
As a result, it is possible for a creditor to garnish a spouse's bank account if their spouse owes a debt.
Even if your spouse opens up a line of credit in their name only, you could still be liable for that debt. Creditors can go after a couple's joint assets to pay an individual's debt.
Keep separate bank accounts, take out car and other loans in one name only and title property to one person or the other. Doing so limits your vulnerability to your spouse's creditors, who can only take items that belong solely to her or her share in jointly owned property.
Debt in Community Property States
No matter whether both spouses agreed to the debts, or even whether both knew about them, both are equally responsible to cover them.
Learn about your rights. Creditors may be able to garnish a bank account (also referred to as levying the funds in a bank account) that you own jointly with someone else who is not your spouse. A creditor can take money from your joint savings or checking account even if you don't owe the debt.
In many states, some IRS-designated trust accounts may be exempt from creditor garnishment. This includes individual retirement accounts (IRAs), pension accounts and annuity accounts. Assets (including bank accounts) held in what's known as an irrevocable living trust cannot be accessed by creditors.
A judgment debtor can best protect a bank account by using a bank in a state that prohibits bank account garnishment. In that case, the debtor's money cannot be tied up by a garnishment writ while the debtor litigates exemptions.
At common law, the spouse – typically the husband – was legally liable for the support of the other spouse. This right could be enforced on the spouse, either by the other spouse or by third-party creditors.
Financial infidelity is when couples with combined finances lie to each other about money. Examples of financial infidelity can include hiding existing debts, excessive expenditures without notifying the other partner, and lying about the use of money.
Do You Inherit Debt When You Get Married? No. Even in community property states, debts incurred before the marriage remain the sole responsibility of the individual. So if your spouse is still paying off student loans, for instance, you shouldn't worry that you'll become liable for their debt after you get married.
Matrimonial debt on divorce
These “matrimonial” debts would typically include debts incurred to fund building work and improvements to the family home, family holidays or the family car.
Your relationship with a person does not make you responsible to return the borrowed money that they independently take – unless you have taken a joint loan of money, that is on a joint bank or credit card. When joint loans are concerned, all the involved parties are equally responsible for paying the debt off.
If a debt collector has a court judgment, then it may be able to garnish your bank account or wages. Certain debts owed to the government may also result in garnishment, even without a judgment.
Foreign or "offshore" bank accounts are a popular place to hide both illegal and legally earned income. By law, any U.S. citizen with money in a foreign bank account must submit a document called a Report of Foreign Bank and Financial Accounts (FBAR) [source: IRS].
What is a non-working spouse entitled to in a divorce? A non-working spouse is entitled to receive alimony payments from their ex-spouse and can acquire up to 50 percent of property. However, this depends largely on whether they are voluntarily or involuntarily unemployed.
To find out if you've got savings or are expecting a pay out, your creditor can get details of your bank accounts and other financial circumstances. To do this they can apply to the court for an order to obtain information. You'll have to go to court to give this information on oath.
If you have any unpaid Federal taxes, the Internal Revenue Service can levy your Social Security benefits. Your benefits can also be garnished in order to collect unpaid child support and or alimony. Your benefits may also be garnished in response to Court Ordered Victims Restitution.
The first step to stopping debt collectors from calling you is telling them the 11-word phrase - “Please cease and desist all calls and contact with me, immediately.”
Under the Fair Credit Reporting Act, debts can appear on your credit report generally for seven years and in a few cases, longer than that. Under state laws, if you are sued about a debt, and the debt is too old, you may have a defense to the lawsuit.