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Can my retirement be garnished, and what can I do about it?

If you are dealing with serious financial issues, such as unemployment or past due bills, you may be worried that your income could be garnished to pay off your creditors. This is a challenging situation for anyone, but for retired Eugene residents on a fixed income, garnishment can cause a particular hardship. Is it possible that your retirement benefits might be garnished if you are seriously behind on your bills?

According to the Board of Governors of the Federal Reserve System, the law protects people who receive certain types of benefits from garnishment, including retirement. For example, federal benefits, including Social Security, veterans’ benefits and Supplemental Security Income, are shielded from being garnished. If you receive federal railroad, civil service or federal employee benefits after your retirement, these are also protected, as well as benefits you are receiving for unemployment or illness.

What if your source of retirement income is a pension from your work in the public sector? Unlike federal benefits, it is possible that this income may be garnished to pay your debts. You might protect your financial interests by depositing your federal benefits into a separate account from the account you use to pay your bills. Filing for bankruptcy might also be a way to discharge your debts and stave off garnishment.

Income garnishment can be devastating if you are already trying to deal with insurmountable financial difficulties. Fortunately, you may have options that can help you lessen the burden. This information, however, should not replace the advice of a lawyer.

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