Legal Question in Credit and Debt Law in Virginia

Re: Can 401k be garnished for a debt?

First of all, a debt collector (that is, someone

not a lawyer) can do NOTHING but harass you by

phone and tell you lies about what they can and

cannot do. A debt collector has no power to do

anything.

Even an attorney cannot garnish anything without

first going to court and getting a court judgment

and persuading the court that the money is due.

However, once a creditor has a court judgment,

the attorney (not a debt collection firm) can

garnish any money held by a financial institution

IF you have the right to withdraw the money.

IF you could take the money out like a bank

account, then the lawyer can garnish the money

as well.

If you could not take the money out, then they

cannot garnish it. Also, if you have to follow

some special procedure like taking out a loan

against the 401k or something unusual, then the

creditor CANNOT garnish the 401k because they

cannot force you to take additional actions to

make that happen.

However, they can garnish wages (within

financial limits) and they can a bank account.

If you are receiving distributions from the 401k

they could garnish the distributions. So if

you are being paid from the 401k, they could get

a court to order that the financial institution

pay them instead.