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 Jersey are 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.

You would then object, offering up proof to the judge that the money is indeed your child's and not yours. This is where being prepared is key. If you are worried that a creditor may levy on that account, then start gathering and keeping proofs that the deposits of money are for the child and not you. You want to be ready to present this to a judge should you need to.

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 find your money in the bank and take that!

Don't want to do this yourself, or have tried to do it and failed? 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 call my office right away at 856-432-4113 or contact me through this site to schedule an appointment to meet. 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!

Want more information on how to fight back with your creditors? Then download my free book, The Biggest Secrets Your Creditors Don't Want You to Know. Become empowered and protect your rights!

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Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.

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