Adam Spence was featured prominently in a front page article today in The Maryland Daily Record for his lobbying efforts against Maryland Senate Bill 397.
Senate Bill 397, proposed by Sen. Wayne Norman, R-Cecil and Harford Counties, sought to eliminate the protections currently afforded to non-debtor spouses relating to bank accounts held Tenants by the Entireties with the debtor-spouse. Currently, in Maryland if a husband and wife hold property jointly (whether a bank account, a house or otherwise), the property cannot be attached to satisfy a judgment against only one of them. The same is true in DC and most of the other eastern states.
SB397 will change that law to make joint bank accounts no longer protected in Maryland and fully attachable, even if the innocent spouse had no judgment against them.
Simply stated, couples that are working jointly to support the family could lose significant amounts of money earned by a non-debtor spouse with no judgment against them. This is not only grossly unfair, it is the reason the exemption existed in the first place.
For instance, if your own spouse had a water bill he or she didn’t pay in college, SB397 would now require you to pay that debt if your joint account with your spouse is garnished. The implications of such liability are truly frightening. Going into court, the burden would now be on the non-debtor spouse to prove its their own money. Currently, the non-debtor spouse has the presumption that the money is theirs and the creditor bears the burden to show that the money really belongs to the judgment debtor spouse.
The bill also had other problems, including a lack of due process. When a garnishment issues, a writ is issued to the bank and a letter is mailed to the judgment-debtor. Under the proposed law, the spouse will receive no notice by mail or formal service of a writ (as the original judgment debtor did). If a judgment-debtor spouse is hiding the debt (which occurs) while also controlling the account, the non-debtor spouse may not ever know he or she just lost their property under this statute. Absent a formal writ being issued and served on the non-debtor spouse, the law as proposed is constitutionally defective as lacking due process.
Perhaps most troubling, SB397 directly violates the Maryland Constitution.
The Maryland Constitution provides that “The property of the wife shall be protected from the debts of her husband.” MD CONST Art. 3, § 43. This provision applies equally to protect the husband from the debts of the wife based on the Equal Rights Amendment, Article 46 of the Maryland Declaration of Rights. Instead of protecting these important constitutional rights, SB397 unequivocally and unconstitutionally removes them.
Even though SPENCE | BRIERLEY’s commercial collections practice may have benefited, Adam still lobbied aggressively against SB 397 as an unacceptable intrusion upon the rights of married couples.
The End of SB 397?
As a result of Adam’s lobbying efforts as well as those of the Maryland Civil Justice Network and the Maryland Bankruptcy Bar Association, the whispers in Annapolis are that SB 397 has died in the House Judiciary Committee. Although the Committee technically has until 11:59 p.m. on Monday to bring the bill up for a vote, such vote appears unlikely.