If you’re living on your retirement funds, there’s a good chance that you are also living on a very fixed income. What can you do when a debt collector tells you that they will be tapping into that income in order to repay a debt? Here’s what you need to know about debt collection and your retirement dollars.
Keep in mind that the rules are different for every state, so it’s important to check with an attorney in your state before assuming that the following rules apply to you.
In Florida, the following applies:
- debt collectors must first file a lawsuit in order to attempt to garnish any funds.
- retirement income in the form of social security is exempt from debt collection seizure
- IRA and 401 monies are protected.
Threats to Your Retirement Security
The ‘Federal Fair Debt Collection Practices Act’ prohibits debt collection agents from making threats that a company cannot or will not act on. However, this doesn’t mean that the person calling you won’t try and threaten to take your retirement funds away. Debt collectors work on commission, and this means that they will try any threat in the book to get you to pay them some money. If a debt collector threatens to take your retirement funds, you may be able to sue the company in return.
Exceptions to the Retirement Rule
There is one exception to the retirement rule. If you owe money to the Federal Government, you will have to pay that debt no matter what. If you have defaulted on a government student loan or owe money to the IRS, the government can take your social security checks and/or tap into your bank account.
What can you do if you owe money to the government? Here are some steps to take:
- pick up the phone and try to make a payment arrangement
- contact an attorney that can help you make an arrangement that won’t result in the depletion of your retirement funds.
If this sounds like what you’re facing, and you’re worried about your retirement funds, make sure to contact a qualified attorney in your state today. It’s nearly impossible to live without retirement money! If you need help contact us at Dellutri Law Group today for a free case consultation. We can help! Call us at (800) 391-4337 or schedule online today!