Can You Protect a Joint Bank Account in Pennsylvania Bankruptcy?

Bankruptcy is never an easy process, and it may be more complicated if you share assets or accounts jointly with someone else. If you are filing for bankruptcy and not the other person, there may be ways that you can protect the joint accounts.

You may protect a jointly held account if the other person you hold it with is your spouse. When only one spouse files for bankruptcy, assets and accounts that are held jointly are held by both spouses. As such, joint accounts may be off-limits during bankruptcy. Even if you are not married, certain accounts may be protected under specific laws or exemptions in Pennsylvania.

Call our Pennsylvania bankruptcy attorneys at Young, Marr, Mallis & Associates at (215) 701-6519 and ask for a free case review to begin.

How Can I Protect a Joint Bank Account from Bankruptcy in Pennsylvania?

When a person files for bankruptcy, their assets and accounts might be at risk. This may be concerning if you share a joint account with someone, such as your spouse or partner. Fortunately, you can take steps to protect joint assets and accounts.

Marriage

If you have a joint account with your spouse, it may be protected because you are married. When a married couple owns assets, accounts, or property, the they each own all of it. Similarly, when a married couple owns a home together, the house can be protected from bankruptcy too if it is owned as a “tenancy by the entirety.”

If only one spouse files for bankruptcy but the other does not, jointly held accounts cannot be seized by a bankruptcy trustee because the account is also owned by the non-filing spouse alongside the filing spouse. Bankruptcy courts have no access to assets belonging to people who are not filing for bankruptcy.

Do Not File Jointly

Since accounts may be protected if only one person on the account files for bankruptcy, it may be a good idea to avoid filing for bankruptcy jointly with your spouse. Our Pennsylvania bankruptcy attorneys can review your debts and assets and determine if filing jointly with your spouse is necessary.

It is possible that only one of you needs to file for bankruptcy to resolve your financial problems, and jointly held accounts may be shielded.

Paperwork and Documentation

Protecting joint accounts or any other assets during the bankruptcy process often comes down to paperwork. Make sure everything about the account you wish to protect is properly documented. Save all account-related paperwork and review it with your attorney.

How to Protect Joint Accounts by Utilizing Existing Bankruptcy Protections

Numerous bankruptcy protections exist to help people shield some of their assets. Your attorney can help you determine if any protections, exemptions, or legal strategies are available for you.

File Chapter 13 Bankruptcy

How you file for bankruptcy may determine whether certain assets or accounts are protected. If you file for Chapter 7 bankruptcy, your accounts may be seized by the bankruptcy trustee assigned to your case and liquidated.

However, if you instead file for Chapter 13 bankruptcy, your accounts will not be liquidated. Instead, you will develop a payment plan that you must keep up with for several years until your debts are under control.

Exemptions

Many protections exist for certain accounts, like retirement accounts. If you have a retirement account, perhaps a joint account with your spouse, it may be exempt from the bankruptcy process. However, you should consult your lawyer to confirm that your accounts meet the exemption criteria.

Separating Finances Before Bankruptcy

A legal strategy that might work for you is separating your finances from your spouse or partner before you file for bankruptcy. If your accounts and assets are mingled, it may be wise to separate them. When you file for bankruptcy, your partner’s assets will not be subject to bankruptcy. An attorney can help you separate money and accounts before filing your bankruptcy petition.

FAQs About Protecting Joint Bank Accounts in Pennsylvania Bankruptcy Cases

Can I Protect Joint Accounts from Bankruptcy in Pennsylvania?

Yes. Joint accounts may be shielded from bankruptcy if only one person who owns the account files for bankruptcy. This is common when married couples have joint accounts and only one spouse files for bankruptcy.

What Happens to Joint Accounts if Only One Spouse Files for Bankruptcy?

When only one spouse files for bankruptcy, joint accounts may be protected by the legal principle of tenancy by the entirety. The account belongs to both spouses. The account may not be subject to seizure in bankruptcy unless both spouses file.

How Should I File for Bankruptcy if I Want to Protect Joint Accounts?

Many people file for Chapter 7 or Chapter 13 bankruptcy. If you file for Chapter 13 bankruptcy, you may set up a payment plan to tackle your debts without liquidating any assets or accounts, whether they are jointly owned or not. As long as you maintain your payment plan, your assets, including joint accounts, should be safe.

Are Any Accounts Protected Under Bankruptcy Laws in Pennsylvania?

Certain accounts may be shielded from bankruptcy under specific legal exemptions. Retirement accounts may be protected from bankruptcy if they meet certain requirements. Review your retirement accounts with a bankruptcy attorney to determine if they can be protected under this exemption.

Do I Need a Lawyer to Help Protect Joint Accounts During Bankruptcy?

Yes. Filing for bankruptcy is a complicated process, and you must thoroughly account for all your assets, properties, and accounts. If anything is owned jointly with someone who is not filing for bankruptcy, such as a spouse, your attorney may be able to help you protect it.

What Happens if the Bankruptcy Trustee Tries to Come After Joint Accounts?

If the bankruptcy trustee on your case tries to seize joint accounts, your attorney can assert available protections. If there is a legal exemption or some other rule that allows you to shield the account from the bankruptcy process, your attorney should know.

Ask Our Pennsylvania Bankruptcy Lawyers for Help with Your Case

Call our Pennsylvania bankruptcy attorneys at Young, Marr, Mallis & Associates at (215) 701-6519 and ask for a free case review to begin.