Several months ago, we received a non-wage garnishment summons relating to a customer’s ongoing child support obligations. We found a joint account held by the customer with his minor child. We froze the account funds, but the customer recently notified us that the funds really belong to his child, the joint account owner. The customer’s attorney has informed us we should release the funds. Should we continue to freeze those account funds?

Yes, we believe you should continue to freeze the funds in the joint account until you receive a court order directing your bank to release the freeze on the account or surrender the funds to satisfy the court’s judgment. If your bank releases the account freeze prematurely and your customer withdraws the account’s funds, your bank risks being held liable for the absent funds.

When a joint account is frozen pursuant to a garnishment summons, Illinois law allows both the debtor and any non-debtor joint account owner to protect the funds from garnishment by filing a claim with the court — not with the bank holding the funds. Upon such a filing, the court will determine whether the joint account funds should continue to be subject to garnishment. Consequently, if the customer wishes to have the joint account funds released from the freeze, he should file his request with the court (alternatively, he may be able to file this request on behalf of his minor child). In either case, the ownership of the funds (and whether they should continue to be subject to garnishment) is a matter for the court to decide.

For resources related to our guidance, please see:

Illinois Garnishment Proceedings, 735 ILCS 5/12-707(a) (“To the extent of the amount due upon the judgment and costs, the garnishee shall hold, subject to the order of the court any non-exempt indebtedness or other non-exempt property in his or her possession, custody or control belonging to the judgment debtor or in which the judgment debtor has any interest. The judgment or balance due thereon becomes a lien on the indebtedness and other property held by the garnishee at the time of the service of garnishment summons and remains a lien thereon pending the garnishment proceeding.”)
Illinois Garnishment Proceedings, 735 ILCS 5/12-711(b) (“At any time on or before the return date, the judgment debtor may request a hearing to dispute the garnishment or to seek exemptions for certain moneys or property by notifying the clerk of the court before that time, using forms as may be provided by the clerk of the court . . . At the hearing the court shall immediately, unless for good cause the hearing is continued, proceed to try the issues.”)
Illinois Garnishment Proceedings, 735 ILCS 5/12-710(a) (“In the event any indebtedness or other property due from or in the possession of a garnishee is claimed by any other person, the court shall permit the claimant to appear and maintain his or her claim.”)
Illinois Code of Civil Procedure, 735 ILCS 5/12-715 (“If a garnishee refuses or neglects to deliver property in his or her possession when ordered by the court . . . the garnishee may be attached and punished for contempt; or the court may enter judgment against the garnishee for the value of the property or the amount due upon the judgment and costs, whichever is the lesser, and have same enforced against the garnishee.”)
Leaf v. McGowan, 141 N.E.2d 67, 71 (Ill. App. 1st Dist. 1957) (“In our opinion it is only fair and equitable that a joint bank account may be garnisheed by a judgment creditor when one of the parties to it is the judgment debtor . . . we are of the further opinion that if a garnishee answers that a judgment debtor holds money in a joint bank account, this is sufficient proof to establish a prima facie case for the judgment creditor that the money in the account belonged to the judgment debtor. The burden is then upon the other party to the joint account to prove what part, if any, of the funds in such account belonged to him.”)