Legal Question in Credit and Debt Law in New York
Non-debtor's Right to Funds in a Joint Account
I had a joint account with my daughter's father (we are not married). He has a default judgment against him for a debt he incurred long before we opened our account. The law firm representing the creditor--without notice to me (I assume that the owner received information by regular mail)--sent papers demanding payment to the bank where we had our account (I am not sure of the amount the amount demanded law because everyone refused to give me papers since I am not the debtor). In any event, at the time the bank received the notice there was approximately $6.92 (left over from his SSI payment)in our joint account. The Bank paid the law firm $100 and subsequently sent a notice indicating that the account was overdrawn $93.08. My questions are: (1) can a bank give a creditor more money than is actually in the account? (2) If yes, would the non-debtor be liable to the bank for the overdrawn amount? (3) If the non-debtor paid the amount due and closed the account (to avoid later consequences) how can the non-debtor recoup her $? (4) If the bank erred in paying out to the law firm more than was in the account, what recousre if any does the non-debtor have against the bank? (5)Is there any recourse against the law firm?
Thanks,
2 Answers from Attorneys
Re: Non-debtor's Right to Funds in a Joint Account
It doesn't sound like the law firm did anything wrong in sending a restraining notice. It does sound like the bank erred in overdrawing your account. The question is your damages. You owed the $6.92 pursuant to a valid judgment, which would zero out your account. You could try talking to the bank manager about covering the remaining $93.08 plus any overdraft fees. My experience tells me you may have to file suit in small claims court to effectively resolve this. If you need further assistance, you may contact me via email.
Re: Non-debtor's Right to Funds in a Joint Account
I think you are mistaken about what happened. I don't believe the bank actually paid ANY funds to anyone.. They just locked it up pursuant to the subpoena. THe $100 is not a payment made by the bank, it is a processing fee charged against your account by the bank. If they did pay out funds, that would be an error since the account was a joint account and you are not the judgment debtor. THe law rquires the judgment creditor to commence a supplementary proceeding naming you as the joint holder and the bank. Only the court can Direct the bank to pay out funds in the joint account and ONLY funds owed by the judgment debtor, not the non-judgment joint holder. I can't imagine such a proceeding would be commenced where there is less than $7 in the account. Under the law, there is a presumption that funds in a joint account are owned 50/50, so we're talking less than $3.50 that could have been paid out (pursuant to court order).I am sure you are mistaken about the $100...I am sure that was a charge against your account for processing the subpoena...banks don't pay out more than whats in the account and I don't believe they actually paid anyone..they just tie up the funds. (The $6.95 is STILL there...but probably went to partially offset the $100 bank charge.) So, just forget it because the $$ is simply not enough to bother about. Just make sure no additional funds are added to the account (stop direct deposit of SS).
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