Can pension funds be garnished for a deficiency balance on an auto loan?

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Can pension funds be garnished for a deficiency balance on an auto loan?

Asked on November 14, 2011 under Bankruptcy Law, Michigan

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Good question. If there is a deficiency judgment against you for a car that was repossessed after you were unable to make its monthly payments, most states have exemption statutes making pension or IRA funds off limits to a levy by the judgment creditor against the judgment debtor.

You need to be aware that pension funds are exempt from levy while held by the entity overseeing the monies. However, if you receive the pension money in hand, you lose the exemption status of the money. It is then subject to a levy.


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