Legal Question in Credit and Debt Law in Pennsylvania
Debt Collection and 401k
I had a judgment from a credit card company against me for $9000.00. That was 2 years ago, I recently withdrew money from my 401k to purchase a new car. The bank notified me that the account had been frozen by the creditors. My question...is it legal to freeze an account with 401k money? TIA
2 Answers from Attorneys
Re: Debt Collection and 401k
I think it is exempt under 42 Pa.C.S. � 8124 but you may have to file a claim for exemption with the Sheriff's Office.
Re: Debt Collection and 401k
Although it is not clear from your question, it appears that you withdrew the money and then deposited into an ordinary account. Once you did that, it was no longer 401K money and was available for execution.
You should consult with an attorney about possible filing bankruptcy to avoid these results.
I trust this answers your question but feel free to call or E-mail on a free initial basis.