Information on credit cards and community property law

Can credit card companies levy my spouse's bank account? The credit cards are solely in my name.

Can credit card companies levy my spouse's bank account? The credit cards are solely in my name.

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Bill's Answer
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  • Examine who is responsible for a debt held in one spouse's name.
  • Review how living in a Community Property State affects debt collection.
  • Consult with an attorney, if threatened with collection.

Thank you for your question about your debt and whether or not your spouse can be subject to collection efforts to collect on your debt.

The Cardholder is Usually Solely Responsible for the Debt

A credit card issuer must file a lawsuit and obtain a judgment against a debtor before taking legal action to force payment of a debt, such as bank levies, wage garnishments, or property liens. If you are the only person listed on the credit card account, then in most cases, the creditor can sue you alone, and if as a result of the lawsuit receives a judgment, the judgment-creditor has the right to levy your bank account and so on.

Consider a few important exceptions to this rule when you determine the risk of not paying this debt. First, if you live in a community property state, the creditor may sue both you and your spouse, under the theory that this debt was incurred as a community debt. Also, if your spouse was a co-signor on this account, even if he or she did not use a card, he or she may will have contractual liability for the debt. However, if your spouse was an authorized user, meaning you simply requested an additional card and he or she never signed a credit agreement, then your spouse has no contractual liability for the debt, but due to your state's community property laws, your spouse may have statutory liability.

Community Property States

Community property is a marital property scheme used in nine states:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

Alaska allows married couples to choose either community property or equitable distribution when determining ownership of marital assets. For that reason, Alaska is often considered a community property state.

Generally speaking, if you live in a community property state, debts incurred during the marriage to benefit the community, such as credit cards used to purchase items that benefit both spouses, are considered community property, and are therefore owed by both spouses regardless of whether both spouses signed the credit card agreement. For example, if you lived in Washington State and incurred debt during your marriage, both you and your spouse, as a marital community, could be sued to collect on the debt. If a judgment were obtained against you, the bank accounts in both your name and your spouse's name could be levied to enforce the debt.

Many creditors do not go to the trouble of suing both spouses in community property states, as doing so tends to complicate the legal process involved in obtaining a judgment. For example, in California, credit card issuers sue the spouse who opened the account. If the creditor chooses to sue only one spouse, and thus obtains a judgment against only the spouse who opened the card, the creditor may levy or garnish the assets of that spouse alone.

If you live in a community property state, and have defaulted on a credit card debt in your name only, consult with an attorney to discuss the liability for you and your spouse. Since community property schemes vary from state to state, it is important to discuss your situation with a legal professional familiar with your state's marital property laws.

Financial Responsibility of a Co-signers and Authorized Users

If your spouse was a co-signer on this debt, meaning he or she signed a credit card agreement when you opened the account, even if that was only to use his or her income in obtaining the desired credit amount, then your spouse is liable for the debt, and thus may be sued by the creditor to collect the debt.

If your spouse was only an authorized user on the account, meaning you simply requested a second card for him or her, but your spouse never signed a credit agreement, he or she is almost certainly not legally liable for the debt. Many consumers confuse co-signers with authorized users. The key difference is  authorized users are not legally liable for the debt, and therefore cannot be sued to collect on the debt.

Review the credit card statements and the credit reports for you and your spouse to help determine if your spouse is a co-signer or an authorized user. If your spouse is a co-signer, both your names will likely be listed on the credit card statement. If he or she is an authorized user, the account will likely appear on your spouse's credit report, listing him or her as an authorized user, but your spouse's name will probably not appear on the account statement.

If you do not live in a community property state and your spouse was not a co-signer on the credit card debt in question, then your spouse is probably not legally liable for this debt. Therefore, the creditor should not be able to levy your spouse's bank accounts, garnish his or her wages, or take other action against your spouse in an attempt to enforce the debt.

However, if you reside in a community property state, being an authorized user does not insulate a spouse from community debt liability.

Consult with an Attorney 

Consult with an attorney to discuss your situation, your state's laws, and what effects this debt may have on your spouse's assets. Also, be aware of potential tax implications. For instance, if you file a joint return, it is possible to have an expected tax refund diverted to pay off a debt that only one party owes. 

If you are struggling to pay your credit card debts, you should explore the various options available to you to assist you in resolving these debts. I encourage you to visit the Bills.com Dept Help page.

I wish you the best of luck in resolving your credit card debts. I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

40 Comments

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  • 35x35
    May, 2011
    Tony
    after divorce ex wife used / increased an unsecured loan that was in both our names and now defaulted. I didn't authorize this and now I am on the hook for over $100,000.00. Is this legal and what can I do?
    0 Votes

    • 35x35
      May, 2011
      Bill
      You need to consult with an attorney who can review the original agreement and determine what recourse you have. It may have been improper for the lender to have increased the joint line of credit without your permission,Your situation is a good reminder that all common debts, loans, and lines of credit should be closed out, when a marriage dissolves.

      The terms of your divorce decree will also have bearing on the issue. If you used an attorney in your divorce, consult with him or her to see if your ex's actions were a violation of the decree. If not, review the decree and seek a consultation with an attorney experienced in family law.
      0 Votes

  • 35x35
    Sep, 2010
    Bill
    I do not have good news for you. As you suspect, community property law, generally speaking, obligates both spouses to pay the debts one spouse incurs. However, I hasten to add that I have not studied Washington family law, and Washington may have exceptions for spouses who are not living together and intend to divorce. Consult with your divorce attorney about this matter. If you do not have a divorce attorney, get one immediately.
    0 Votes

  • 35x35
    Sep, 2010
    Bob
    My wife walked out over a year ago. Before doing so she acquired a Capitol One credit card and gave me a second to use because she said the interest rate was lower than my own Bank of America card. I don't recall if my name was on the Capitol One card, but do not think so. I never signed any document regarding it. So on the day she walks out she wants the card back and I gave it to her. Over a year later she decides she wants a divorce and since we live in Washington State (community property state) I am concerned she will run up a huge balance, leave the country (she's a resident foreign national) and I'll be stuck with the bill. I contacted Capitol One and they said they can't help me if I'm not associated with the account. They didn't care about community property and the like. I should also mention my wife's name was on my Bank of America card and when she contacted them to remove her name the bank immediately closed my line of credit that I'd had for over 20 years and had never missed a payment. My question is am I liable for the debt on the Capitol One card if she runs up a huge tab and leaves the country? She is capable of doing so out of spite. Thank you.
    0 Votes

  • 35x35
    May, 2010
    Bill
    You mentioned the title of the house is in her name and your name. Because you titled the property in both of your names, any judgment-creditors for either spouse can attach a lien to that property. The debt being incurred before your marriage is irrelevant under these circumstances.
    0 Votes

  • 35x35
    May, 2010
    Joe
    My wife before we were married incurred a debt from a Neurology Clinic. She never was able to pay the $500 or so dollars and has been in collections for this debt about 4 years. We bought a house 1 year ago. Now the collection agency of the medical debt is putting a lien on the house. The loan is only in my name and title is in hers and my name. How can they put a lien on the house if the debt happened before we were married? Please help.
    0 Votes

  • 35x35
    Mar, 2010
    Bill
    I would like readers to offer their thoughts and suggestions regarding your question. Readers?
    0 Votes

  • 35x35
    Mar, 2010
    Chuck
    Sir: I live in California. About a year and a two years ago, my wife came to me all despondent and confessed that she had run up $98K in credit cards...I was more than shocked....but the vows say in sickness and health, richer or poorer...so I agreed to take out a loan against the house and paid off her debt thus encumbering the house which should be paid off by now. What she spent it on I have no idea...there's not much to show except we raise and show dogs. I retired in 03 and am living on my retirement, some monthly disability checks from the military, and a small social securtiy check. I just found out that she has gone out AGAIN and run up another $95K in credit card debt...and I'm at the end of my rope. Quite obviously she has a psychological problem with spending but that's beside the point and something I have to deal with. I own several Porsche turbos, a fifth wheel, nice boat, and dodge dually diesel all of which I paid off on my own and thru a medical settlement and and own everything free and clear. I've sunk all my money into the house in upgrading, bought all the appliances replaced the roof, brick work, painting etc, and paid for it all. We maintain separate accounts except for checking which she has access to do online banking thru Bill-Pay (we share in house payment and car insurance, utilities etc)...so that's a joint account that my retirement check goes into. The phone has been ringing off the hook and I won't even answer the phone to my own home...all my friend tell me to divorce her, but then I'd lose what house I do have and I'm 67 now and not exactly a spring chicken and not too anxious to venture out into the cold world with the economy the way it is. I have a bit in a separate savings, and another account with about $80K that I set aside to leave my for my kids by another marriage. Other than have my head examined for a vacuum leak...what's my potential liability now?
    0 Votes

  • 35x35
    Mar, 2010
    Bill
    The answers to your questions are very fact-specific, and I would be doing you a disservice by trying to answer your questions here based on what you provided. You need to consult with a Washington attorney who has experience in family law. He or she will be able to review your entire situation in detail, and will give you precise answers to your questions.
    0 Votes

  • 35x35
    Feb, 2010
    kathy
    I filed for divorce on Feb.23, and I work full time. we own a home which we can't keep we are current on mortgage payments. He is unemployed ANDWE LIVE IN wa and we live in WA state. He owned a 3 acre parcel before marriage and I owned a home. If we default on the home which we now live in will my home that I owned before marriage have a lein? Or will he be equially liable on his 3 acre parcel? Could he quit claim his property to a family member prior to the divorce filing?
    0 Votes

  • 35x35
    Feb, 2010
    Bill
    The federal law Fair Debt Collections Practices Act (FDCPA) govern the actions of collection agents and original creditors who are collecting on a delinquent debt. See the Bills.com resource Advice If You're Being Harassed by Collection Agent for a discussion of the FDCPA and your rights. Regarding your question, there is no set number of calls per day that define harassment. Although there is no bright-line test, 40 per day is not reasonable, in my humble opinion.
    0 Votes

  • 35x35
    Feb, 2010
    MK
    I have an issue with credit card companies incessantly calling my cell phone. I have spoken to Chase several times, that the bill had been sent - since then I have recieved over 40 calls from them. At which point do they cross the line for harrassment?
    0 Votes

  • 35x35
    Nov, 2009
    Jan
    My husband has an american express credit card I am not listed as autorized user, never signed an agreement. he is dying from liver cancer am i libel for that debt after he passes away. we live in california
    0 Votes

  • 35x35
    Nov, 2009
    Bill
    The decedent's estate has liability for his or her debts, and not family members. Please read Am I Liable for My Deceased Spouse's Debts?, and in particular read the section "Deceased spouse's debt" to better understand the issue. Unscrupulous collection agents tell family members they have liability for a decedent's debt, but that is not the case unless the family member was a co-signer on that particular account.
    1 Votes

  • 35x35
    Oct, 2009
    tanya
    we live in Washington state and my boyfriends ex wife defaulted on a credit card with Citibank after their divorce. he has since found out that it has been posted on his credit report. he was and authorized user not a co signer and has not received a letter of default from Citibank. how does he go about removing it from his credit report?
    0 Votes

  • 35x35
    Oct, 2009
    Bill
    He should send a "dispute listing" letter to the credit reporting company that is displaying the erroneous information. See the Bills.com debt self-help page for a sample letter. Then, in three months or so he should get another credit report to make sure the item was removed.
    0 Votes

  • 35x35
    Oct, 2009
    Bill
    In theory, as residents of a community property state, both spouses are liable for the debts that benefit the community (with the exception of student loans). Unless Arizona has a law that reverses this general rule, the non-signing spouse has liability for debts of the signing spouse. In practice, however, creditors rarely pursue spouses in community property states. That is not to say it has never happened -- but I have not seen it happen.
    0 Votes

  • 35x35
    Oct, 2009
    mike
    I live in Arizona and my wife purchased a car during our marriage that we're thinking about defaulting on. She does not work, only I do...and I am not listed on the loan. I understand the whole "community property" concept, but to what certainty will the creditor come after me (the non-listed spouse), or will they just keep pursuing her? thanks
    0 Votes

  • 35x35
    Oct, 2009
    Bill
    Not immediately. However, you have to assume that a motivated creditor will eventually find your new account. I recommend you consult with an attorney in your state who is experienced in consumer law or bankruptcy to determine what your rights are in your state. You may be able to prevent the creditor from levying you bank accounts.
    0 Votes

  • 35x35
    Oct, 2009
    calvin
    i have a checking account that i am about to close due to a lien from a creditor has put on it , if i open a checking account at another bank will they be able to acquire that info and put a lien on that checking account also
    0 Votes

  • 35x35
    Jul, 2009
    Bill
    You need to arm yourself with knowledge about Texas law so you understand your rights options. The answer I give the reader at the very top of the page here is a good place to start to learn about the general issues, although it is not specific to Texas. Next, you need to understand some of Texas' rules. See this page for laws called "statutes of limitations" and exemptions that may apply for you: http://www.bills.com/collection-laws/ Next, consider your options. You may be a candidate for either debt negotiation and settlement, or debt consolidation. Here is a great resource to learn about debt negotiation and settlement: http://www.bills.com/debt-negotiation-and-settlement/ Start here to learn more about debt consolidation: http://www.bills.com/debt-consolidation/ For a free online debt consolidation quote, visit: https://www.bills.com/debthelp/consolidate_debt/ Finally, and this is very important, if you receive any summons or document from your local court, act on it! You always have options, and ignoring a summons or court order always results in fewer options for you.
    0 Votes

  • 35x35
    Jul, 2009
    Jeanette
    Hello! I live in texas, And would like to know if they can put a lien in my home I have to many credit cards. And i can't pay because my husband lost his job. I am not in the loan but i am in title. please help! I owe almost 10k. and the credit cards are only in my name.
    0 Votes

  • 35x35
    May, 2009
    Bill
    Arizona is a community property state. The cards that you co-signed for, might be construed as community property and therefore the collection agency might just try to collect from your husband as well. I am not an attorney, so I don't know about the details, you should consult with a qualified attorney just to be sure you know what the consequences will be.
    0 Votes

  • 35x35
    May, 2009
    Martha
    Hello, I live in Arizona. I cosigned on two credit cards for my son, and he ran up large unexpected balances on both that he cannot pay. I also cannot pay the cards. Can the credit card company sue my husband or just me? Thanks, Martha
    0 Votes

  • 35x35
    May, 2009
    Mike
    Seems like this has been going on for a while now. You will need to check what the credit card issuer's policy is about fraud charges, some of them require that you report the charges as soon as you notice them, and others may limit the amount they will reimburse. The fact that you are still not legally separated will also complicate the matters in that the credit card companies might not agree to your fraud claim. Still, call up the credit card companies immediately and see what they have to say, and if nothing else, cancel the accounts so that the charges do not continue.
    0 Votes

  • 35x35
    May, 2009
    Tanya
    I live in WA state. I just found out that my husband of 10 years (we are currently seperated) charged up two of my lines of credit and credit cards without my knowledge (old cards that I thought I had closed). He has been making payments regularly and intercepting the mail so I had no idea this ever happened, until I pulled my credit report. I feel so stupid! Am I liable for the debt or can I call the bank and claim the charges and cash advances were made fraudulently? He is not on the accounts as a co signer or authorized user. The accounts are in my name only and were abtained prior to the marriage. The money went into his business checking account which I am an authorized signer (trying to get removed). Thanks in advance for your reply.
    0 Votes

  • 35x35
    May, 2009
    Bill
    Yes, check out: http://www.bills.com/collection-laws/ This will have the statute of limitations in your state.
    0 Votes

  • 35x35
    May, 2009
    dave
    is there statue of limitations on the dept,
    0 Votes

  • 35x35
    Mar, 2009
    Bill
    I am sorry to hear about your situation Lisa, but you are mostly correct that they could put a lien on your home. They could also try to levy a bank account (so don't keep a bunch of cash in your bank account) but they probably cannot garsish you since your income is protected if it is indeed pension income... but really you should call and speak to an attorney to make sure that everyting lines up. Good luck.
    0 Votes

  • 35x35
    Mar, 2009
    Lisa
    I live in New Mexico and have a judgment against me. I tried to make payment arrangments with the creditor before and after the judgement but they refused anything but the full balance. My only income is a pension,I have a 30 year morgage on my house and have two vehicles one paid for and the other I still owe. what are they going to do now ? will they put a lien on my house or car? i have no intentions of ever selling my house? My husband died and left me with this debt to deal with when he was the only one with income,it was half his resposibility right?
    0 Votes

  • 35x35
    Nov, 2008
    Bill
    I don't think the credit card companies can place a lien on your vehicle (at least, I have not heard of many instances of them doing so). Because you are already late on your credit card payments, a cash out refinance is not an option (which could have bee a feasible option if your credit was good). The best option I can think of for you is a debt settlement program. I suggest that you get a free consultation from Freedom Debt Relief (www.freedomdebtrelief.com, 1-800-544-7211). They are the leaders in this business, and after they look at your situation, they will be able to tell you what your best solution is.
    0 Votes

  • 35x35
    Nov, 2008
    Larna
    Hello, my husband lost his job months ago, his employer fought his unemployment and won, and now he is not working (just any side jobs he can find), and I am working part time. We have acquired around 50,000 in credit card debt using our cards to pay for living expenses, since his job in sales only brought in about 15k in the past year. We own a home, and have not been late yet on the mortgage. We also own 1 car, free and clear, and have one that we owe about $3800.00 on. My question is, what can I do to keep my car without the creditors assigning a lein against it. Our credit cards are just going 30-60 days, and I cannot promise the creditors anything, since every penny we scrape together needs to go towards the $1500.00 mortgage and utilities, food, etc. It is probably worth 16-18000, but if I lose it I cannot work at all. We also have 3 children, and my husband has been looking for work for months! Thank you in advance!
    0 Votes

  • 35x35
    Sep, 2008
    Sam
    I strongly encourage you to consult with an attorney licensed in Wisconsin who can carefully analyze the details of your situation and tell you the options available to you under your state’s laws. For example, even though you have too much home equity to file Chapter 7 bankruptcy, you may be able to file for bankruptcy protection under Chapter 13 which could help you resolve these judgments and protect your assets. To read more about bankruptcy, I invite you to visit Bills.com at http://www.bills.com/bankruptcy/. Given the possible repercussions of this creditor's efforts to enforce the judgment it has obtained against your husband, the cost of hiring an attorney will likely be well worth the expense. I can tell you that Wisconsin law does offer some protections to debtors whose creditors are attempting to execute judgments against them. For example, you may be able to claim an exemption of at least some of the money in your bank accounts; much of your personal property may also exempt from creditor execution. To read more about Wisconsin’s exemption laws, you can visit http://www.bcsalliance.com/debt1_wisconsin.html.
    0 Votes

  • 35x35
    Sep, 2008
    scott
    My husband was self employed for several years and developed credit card debt. He suffered an injury a year ago and has been unable to return to work. He has defaulted on several business credit cards and has closed the business. Now one credit card company is seeking a writ of execution against both my husband and his company. They are requesting our bank seize our business and personal accounts and to obtain a lien on our real property. We are unable to file for bankruptcy because we have too much equity in our home; however, we are unable to get a home equity loan to pay the debt because the credit card default has decreased out credit rating. We are residents of WI, cannot afford an attorney and are wondering exactly what the laws are in WI regarding default on an unsecured credit card debt.
    0 Votes

  • 35x35
    Sep, 2008
    Melissa
    My friend has a levy against his property for a credit card debt. They did not take the property but can he sell it? I am thinking he can but the $ would go to the credit card company.The levy is for $14,000. The propert is only worth about $6,000. Can he sell it?
    0 Votes

  • 35x35
    Sep, 2008
    Bill
    If the credit card has obtained a levy on the said property, that gives it the first right to the proceeds of the sale, regardless of whether the proceeds of the sale is enough to cover the levy. Therefore, you are right, the money would go the credit card company.
    1 Votes

  • 35x35
    Sep, 2008
    Rajan
    The first thing that you need to do is hire an attorney in your area to defend your rights in this situation. You may have several ways to get your vehicle back without paying the full balance of the debt which you obviously cannot afford. First, if your state offers an exemption for automobiles or general personal property, you may be able to have you attorney assert your exemptions, making it financially infeasible for the judgment creditor to proceed with the sale of the vehicle. If your attorney does not think that is a viable option, you may be able to file an emergency petition for bankruptcy protection; if you file before the vehicle is sold, the automatic stay created by the bankruptcy filing may allow you to regain possession of the vehicle while your bankruptcy case is proceeding. To read more about bankruptcy, you can visit the Bills.com Bankruptcy Resources page at http://www.bills.com/bankruptcy/. Finally, since your husband's name is also on the vehicle's title, and only your name on the credit card, the creditor should only be entitled to half of the vehicle's equity (assuming you do not live in a community property state); if your attorney thinks that your husband is entitled to compensation for his interest in the vehicle, he should be able to help you exert that claim, which may make selling the vehicle a unprofitable measure for the creditor. I am not licensed to practice law in your state, nor do I know enough about your situation to offer good advice; I strongly encourage you to consult with an attorney in your state as soon as possible. The sooner you take action, the more likely it is that you will be able to reclaim your vehicle; if the creditor sells the car before you take steps to reclaim it, it will be much more difficult to take back the property. For more information for consumer struggling with credit cards and other debt, I invite you to visit the Bills.com Debt Help page at http://www.bills.com/debt-help/.
    0 Votes

  • 35x35
    Aug, 2008
    KAREN
    Hello, I have a Judgement against me for credit card debt. The county sheriff showed up with a Writ of Execution and a Levy to take my car. They took my car. Now the Attorney will not work out any payment arrangement with me for me to get my car back. It is either the full amount of the debt, $15,000.00 or I never get my car. I am now unemployed, and have no way to go get a job because of this. What can I do? My husbands name is on the Title of my car as well, but it stats my name OR his name. Will that hurt my case since it has OR, and not AND? Also, can we file a Motion to dissolve the Write and Levy, due to my car being partially his Marital asset? Thank you, Karen Thoma
    0 Votes

  • 35x35
    Dec, 2007
    Dennis
    I am retired, live on teachers pension and social security. I have stupidly run up 18k with Capitalone and 8k with Washington Mutual. In addition, my grandson has defaulted on his student loan that I consigned for with Citicorp. I have been current with my credit cards until a month ago but was shocked to find that the Capitalone account interest rate has soared from 5.9% to 27% while the Washington Mutual account went from 9% to 26%. Two years ago my credit rating was 768. I suspect that my grandson's debt (which is also mine) has dragged my rating down to the point that both credit card companies increased my interst rate. In additon, the Capitalone card monthly payment increased from $500 to over $1000. I have called Capitalone and explained all of this to them. I have been a loyal customer since 2002 and was NEVER late on a payment. They would not budge and would not offer any help for me. I do not want to default on my obligations but I was struggling to make the $500 payment and now its twice as hard to pay this debt. What can I do, short of filing bankruptcy? Please help!
    0 Votes

  • 35x35
    Dec, 2007
    Nithin
    Because you co-signed for your Grandson, and that loan is now in default gives the credit card companies reason enough to invoke what is called the Universal Default Clause. Universal default is the term for a practice in the financial services industry for a particular lender to change the terms of a loan from the normal terms to the default terms (i.e. the terms and rates given to those who have missed payments on a loan) when that lender is informed that their customer has defaulted with another lender, even though the customer has not defaulted with the first lender. My suggestion to you is to try and get current on the loan that you co-signed for your grandson because as long as that loan is in default, it will be reported so on your credit report. If possible, try and continue to make the payments on the credit cards, and call them up again to negotiate your interest rates. If that is not possible, then depending on whether you own a home, you could go in for secured debt consolidation loan, credit counseling or a negotiated debt settlement service. Each one of these options has its pros and cons. You can find out more information about each of these options on Bills.com.
    0 Votes