Joint Bank Accounts
I was wondering what happens with joint bank accounts when one spouse goes bankrupt. I am unemployed but because my husband works away from our house (travels) we have joint accounts so that I can pay for bills and living costs. One account his pay is put into and is used for daily things, the other account is a small nest egg of about $5000. If I go bankrupt, what will happen to this money, since about 99% of it is from his income?
There is a strong possibility that of the $5,000, you will loose 50% of these funds. The argument is that regardless of your current status of being unemployed, the money comes into the household for the benefit of everyone and the presence of a joint account simply reinforces this principle. Having said this, what is required is a more indepth review of your situation to determine if this will actually be the case so you would be best to discuss with a licensed trustee in your area.
You also need to be aware that transferring this money out of it’s existing account to someplace else or simply spending the money in an attempt keep it out of the bankruptcy estate often leads to you having to repay the entire balance of the funds (not just the 50%) so you are always better to leave things as they are, that way you significantly reduce the likelihood of problems.