Wage Accounts: Are They Necessary?

Wages paid to the head of household are exempt from creditors, and the wages remain exempt for six month when deposited in a bank account. Many potential debtors set up separate bank accounts which they title as a “wage account” in which they deposit their wages and salary and no other money. The purpose of the wage account is to segregate protected wages and not commingle wages in accounts with money from other sources. The concern is that if the head of household deposit wages in a checking account owed jointly with the spouse or owned by another entity, such as a living trust, the wage protection would be lost. But, are separate wage accounts always necessary?

The statute that provides for the protection of wages from garnishment does not require deposit of protected wages into a separate wage account. In fact, Section 222.11 (3) states that the commingling of earnings with other funds does not by itself defeat the ability of the head of household to trace protected earnings. As long as someone can clearly trace and identity wages deposited into an account the wages are protected. Wage accounts may be helpful, but a separate wage account is not necessary to protect deposited earnings of the head of household.

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