Judgment Creditor Levies Joint Bank Account When Judgment Is Only Against One Account Holder - Is The Non-Debtor Account Holder Out Of Luck?

  What happens when a judgment creditor holding a judgment against only one spouse levies on their joint bank account and moves for turnover of 100% of the funds in the account - should the husband and wife kiss all the money goodbye?   Not necessarily.

The New Jersey Multiple Party Deposit Account Act (“NJMPDAA”), N.J.S.A. § 17:16I-1, et seq., which governs “multiple party deposit accounts” (“MPDAs”), including joint bank accounts, provides in relevant part:

Unless a contrary intent is manifested by the terms of the contract, or the deposit agreement, or there is other clear and convincing evidence of a different intent at the time the account is created: 

a. A joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sums on deposit. In the absence of proof of net contributions, the account belongs in equal shares to all parties having present right of withdrawal. 

N.J.S.A. § 17:16I-4a.  

The NJMPDAA defines a "Joint account" as "an account payable on request to one or more of two or more parties whether or not mention is made of any right of survivorship, and regardless whether the names of the parties are stated in the conjunctive or in the disjunctive." N.J.S.A.17:16I-2(d).

As demonstrated by this statute, the share of each joint account is determined by each account holder's net contributions proportionate to the amount on deposit in the account.   The statute further provides that there is a rebuttable presumption that each account holder owns an equal share of the funds, or 50%.   To defeat this presumption, the non-debtor spouse will have to prove that he or she contributed more than 50% to the joint account.   For example, proof could be in the form of employment checks directly deposited into the joint account, social security checks, monies inherited, gifts received, etc. 

Some judgment debtors have even resorted to going on the offensive, accusing collection lawyers and their clients of violating the Fair Debt Collection Practices Act ("FDCPA) simply by causing the sheriff to levy on a joint bank account when the judgment is only against one account holder.    A recent unpublished decision issued by the United States District Court for the District of New Jersey on May 21, 2012, in Kiefer v. New Century Financial Services, et al., 10-3938 (SRC), rejected the judgment debtors' FDCPA claim.