Tip #1: Where only one of two account holders owes a judgment debt, consider splitting the joint account into two accounts and keeping all of the non-debtor’s funds in the account that is solely in the non-debtor’s name. Paying expenses first from the account that is in the judgment debtor’s name will reduce the balance in that account and minimize the amount that is vulnerable to seizure.
Tip #2: Remove the judgment debtor’s name from any account where the funds really belong to someone else, such as a child or elderly family member. If the owner of the funds needs the judgment debtor to manage the account, use a power of attorney or the account should be clearly designated as a trust.
Tip #3: Place funds on a prepaid card, such as those sold at big box or drug stores, or by opting for wages sent via a payroll card, if available. Funds in an account linked to a prepaid or payroll card may be subject to seizure, but, as a practical matter, judgment creditors are less likely to seize these types of accounts, particularly if the funds are held at a smaller bank. Check the prepaid and payroll card fees and understand how to avoid high fees, especially by using only ATMs in the card’s network. Avoid prepaid cards, debit cards, or “checkless checking” accounts offered by payday lenders and check cashers, which may have high fees or even overdraft fees.
Tip #4: Seizure can be avoided by opting out of direct deposit payments to a bank account and instead receiving paper checks. Paper checks do have a greater risk of theft and loss and will have to be cashed. Avoid expensive check cashers. Look for local stores or friends or relatives to cash a check without high fees. Even if the consumer must pay a fee to cash a check, that may be better than having the check deposited and then seized or frozen in its entirety.