QUESTION
Can debt collector withdraw money from a bank account?
Asked on Jul 12th, 2011 on Bankruptcy - California
More details to this question:
When my brother was 16, our mom helped my brother opened a bank account. My mom at that time already had an account with the bank so she helped my brother open another one. I think there were 2 separate accounts but my mother has access to my brother's account. That was 8 years ago. My brother is now 24 and independent, living by himself and supporting himself. He did not realize that our mom had closed her first account and had some debt. My brother never took my mom's name off the second account because he just doesn't think it's necessary. Today he was traumatized when he found out that a debt collector had withdrawn $600 from his account, basically emptying it. My brother is a college student so he doesn't have much money. Upon checking his statement, he found out that they had withdrawn smaller amount in the past few months ($50 each) but he didn't notice . My brother does not owe anyone any money so he assumes that this has to be our mom's debt. Is this legal? Can collection agency withdraw the money in this situation? I told my brother to go to the bank tomorrow and file a complaint/dispute. I have not talked to my mom to find out who she owes money to. Can they take money from my brother's account if my mom's name is still in it? Thanks for answering.
11 ANSWERS
Your question is based on supposition, you need to gather facts, then come back.
Answered on Jul 22nd, 2011 at 9:37 AM
Bankruptcy Decision Attorney serving San Diego, CA
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Law Office of Daniel G. Shay
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The short answer is yes. They can take money from any account your moms name is on in the form of a set-off, if one owes their bank money, or a levy once a judgment is entered. Filing bankruptcy would prevent this.
Answered on Jul 15th, 2011 at 3:52 PM
Bankruptcy Attorney serving Herndon, VA
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Maureen O'Malley
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Afraid so. If her name is on the account, they'll take it. Your plan is a good one.
Answered on Jul 15th, 2011 at 3:48 PM
Spencer Hale
Yes, but first they must have a court order allowing them to do so. Also, if the order only states that your mom owes the money then the collection agency can only seize your mom's money. In Arizona, the names on the bank account do not necessarily indicate actual ownership of the money within the account. Ownership of the money in the account depends on ownership of the money before it was deposited. For instance if your mom did not deposit any money in the account then none of the money belongs to mom and all of the money that was collected belongs to your brother. If this is the case then you can get your brother can get his money back so long as he can prove that the money was his and not mom's.
Answered on Jul 15th, 2011 at 3:45 PM
Debtor's Rights Attorney serving Atlanta, GA
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Theodore N. Stapleton, P.C.
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Creditors can only withdraw money from an account after obtaining a judgment against the account owner and garnishing the account, unless the creditor is the bank at which the account is located in which case the bank may have a right of set-off.
Answered on Jul 15th, 2011 at 3:29 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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If a creditor has a judgment it can levy on bank accounts in the judgment debtor's name. If an account should not have the debtor's name the name should be removed. You might want to have the account order show proof that it is not the debtor's money. You could sue in small claims court based on that.
Answered on Jul 15th, 2011 at 3:04 PM
Glen Edward Ashman
First of all your brother has made two blunders - (1) leaving his mother on the account, and (2) not looking daily at his account online, which all people need to do. Whether money can be withdrawn depends on what his mother signed. If she approved it, even years ago, the money probably is toast. He needs to close the account and open his own. The money probably is gone, but he needs more information to know.
Answered on Jul 15th, 2011 at 2:15 PM
Family Law Attorney serving Indio, CA
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Law Office of Xochitl A. Quezada
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If the creditor is the bank with whom your mom has the account then they can take the money. Even though she was not actively using this account, her name was still on it. Another possibility is that there is a judgment against your mother and the creditor is levying on her accounts. Once again, this would be legal. You need to speak with your mother regarding her financial situation and have her name removed from your brother's account. In the alternative, have your brother open a separate account.
Answered on Jul 15th, 2011 at 1:56 PM
Family Law Attorney serving El Cajon, CA
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Law Offices of Sheryl S. Graf
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A debt collector cannot process an electronic payment without an account holder's authorization. It sounds like your mother, a joint account holder, may have given them that authorization. If the amount of the transaction exceeded the authorization (i.e. the collector was authorized to take $50 but they took $600 instead), then the charge should be disputed with the bank immediately. Before going to the bank, your brother may want to check with Mom first to find out if she authorized the transaction. Someone had to have given the necessary bank account information to the debt collector! If it was Mom, your brother should ask Mom for repayment and possibly consider filing a lawsuit if she doesn't pay. The only way I can think of to prevent this from happening in the future is for you brother to close the joint account and open a new account in his name alone.
Answered on Jul 15th, 2011 at 1:56 PM
The collection agency can only take money from the joint bank account if they have a judgment against your mother or if your mother gave them permission. If they had a judgment, your brother should have gotten notice from his bank that the money had been garnished. Have you or he talked to your mother? It's very unlikely that the bank would permit the withdrawals without authorization.
Answered on Jul 15th, 2011 at 1:56 PM
Bankruptcy & Debt Attorney serving San Diego, CA
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Jackie Robert Geller Attorney at Law
If your mom is still a joint owner of the account, a creditor with a judgment can levy that account regardless of whose money it was. However, there is a process called Claim of Exemption that your brother may be able to utilize. Call a debtor's rights attorney. Also, set up another account without Mom.
Answered on Jul 15th, 2011 at 1:38 PM