A New Jersey Debt Relief Lawyer Explains If Your Child's Bank Account is Safe From Creditors

As a parent, you may have set up bank accounts for your children to keep gift money, earned money from jobs, etc., to keep track of their funds. This can also be done if you are a guardian or power of attorney over an incapacitated person. The funds in the accounts may not be your money, but you are the one controlling it. New Jersey debt relief attorney Steve Richardson explains if your child's account is safe from creditors if you owe debt.

Can a Creditor Levy Your Child's Money?

The simple answer is yes; a creditor can levy money. 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.

Can a Creditor Take the Money Out of Your Child's Account?

A creditor cannot take money out of your child's account. A bank levy is a two-step process. First is the freezing of the funds in the accounts done by ambush. You won't get advance warning that it is going to happen. The bank still has the money, but you will not be able to 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, which must be done on notice to you, allowing you to object.

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

Objecting to the Levy

If you want to object to a levy in New Jersey and need guidance, download attorney Steve Richardson's free Bank Levy Survival Kit. You will gain access to the required court form to fill out and instructions on how to file it to protect your rights. Use this kit to help you object to the levy after you get a notice from the bank or as a shield to object to the Motion for Turnover when you get it from the creditor.

Debt Payment Options

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 you tried to do it and failed? Do you owe more than $10,000 to the creditor? Then, our attorney 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, just click this link to schedule a call with our office to discuss your case. Attorney Steve Richardson has represented creditors for many years and is familiar with the collection industry and how it works.  

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

Are you a visual learner rather than a reader? Do you enjoy watching YouTube to learn new things? Then check out our 3-part video series on how creditors use lawsuits in New Jersey to collect debts. Just click here for more information on how to get the links!

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