Pension Benefits and Bankruptcy
You receive pension benefits, and you are facing a possible bankruptcy. The first question you have is, will filing for bankruptcy affect my eligibility to receive my pension? The answer is no, filing for bankruptcy will not affect your eligibility to receive your monthly pension benefits. The next question you have is, can a creditor garnish my pension?
There is an important limitation to a creditor’s ability to garnish your account at a bank or credit union. If the sole source of the income going into your account is pension benefits, the account cannot be garnished. But if there are other sources of income being deposited into that account, the funds become comingled and the funds lose their identity as pension benefits. In that scenario, funds in your account can be garnished even though some of the funds are pension benefits. The way to keep this from happening is to have an account only for pension benefits and nothing else.
The above information is a general overview and is not intended to be used as legal advice. If you are considering filing for bankruptcy, the best thing to do is call our office at 248-557-3645 and schedule a free consultation so you can receive advice which is tailored to your specific circumstances.
By: Michael Benkstein, Esq.
Managing Attorney, Bankruptcy Department
The Law Offices of Joumana Kayrouz, PLLC