Can pensions be garnished by creditors?

Dear Reader, Most of the time, pensions have the same protections from creditors or debt collectors as your Social Security benefits. Your debt collectors have various options to do so: they could garnish your wages, sell your non-exempt property and assets or seize your bank account.

Can a creditor take my pension?

Child support and government debts, like taxes and student loans, can garnish your pension check, but most other creditors cannot. A creditor might not be able to garnish your pension or Social Security check, but the creditor can take the money after you deposit it into the bank, up to the legal limits.

Are pensions subject to garnishment?

In general, pension income enjoys the same protection as Social Security benefits — off limits to most creditors, except for government debts and child support. And pension income is protected from garnishments before it’s given to you, but not after you receive it.

Can a pension be levied?

Pensions are not wages and, except for child support, cannot be garnished. State laws vary on wage garnishment. Once deposited, funds may be open to account levy.

Can a pension be garnished by a debt collector?

The quick answer is that your social security income cannot be garnished at the source, and most pensions are exempt from garnishment too. You would first have to be sued, and a judgment entered in court, before there is any risk to your money from a debt collector.

What kind of debts can you garnish in Michigan?

Federal law, for example, makes Social Security subject to garnishment only for federal taxes (and a few other federal debts), child support, and alimony. Michigan law adds the following additional types of exemptions: Pensions and retirement benefits: Michigan is more protective of retirees than most states.

Can a state pension be garnished in Michigan?

Pensions and retirement benefits: Michigan is more protective of retirees than most states. Not only are state employee, public school employee, and police and firefighter pensions protected from garnishment, but retirement benefits generally, including IRAs, enjoy broad exemptions from garnishment.

How does a periodic garnishment work in Michigan?

A periodic garnishment lets the creditor take money from a source that pays you on a regular basis, such as your earnings or income from rental properties. Your earnings include your hourly wage or salary and any commissions or bonuses you might get. It also includes payments from a pension or retirement plan.