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A pension fund is an instrument to help a person financially and provide security to the person in the post retirement life. In case a person files for bankruptcy uncertainties may arise as to which assets will come under its purview and which will not. At times it becomes difficult to get proper information regarding bankruptcy and pension. This article provides answers to some of the most commonly asked questions about issues related to such situations. In the State of New York does the pension income of an individual gets affected if the person files for bankruptcy?
Laws are not the same throughout the U.S. They often differ from state to state. In the State of New York the pension income of a person may come under the purview of collection in a bankruptcy. Even though the creditors may not have the right to garnish the person’s pension payment they may garnish the bank account that holds the income. However, as per Exempt Income Protection Act if the pension amount is less than $1740, the creditors may not be able to garnish the bank account also. Is the Postal Service Annuity Pension of a person immune to bankruptcy?
Usually it is protected from creditors in a case of bankruptcy unless the federal government agency or one of its organizations is its creditors. When a person files for Chapter 7 Bankruptcy would the pension income be factored into a Means Test?
It might be taken into account while considering the monthly income when a bankruptcy is filed. Irrespective of whether an individual falls under the median income level or not, this might affect the person. Furthermore, it might help determine whether a Means Test is necessary for the person to qualify for a Chapter 7 Bankruptcy. Therefore when someone files for Chapter 7 Bankruptcy the pension might be factored into a Means Test. Is Government Pension considered to determine the total income available to fund a Chapter 13 Bankruptcy?
In certain cases a Government pension might be considered a disposable income in a Chapter 13 Bankruptcy. While calculating the total income, it might be taken into consideration. Are the Social Security Benefits and VA Disability Pension of an individual affected in a bankruptcy?
Usually Social Security Benefits and VA Disability Pension are out of the purview of bankruptcy. Hence, these may not be affected. These benefits are exempt from collection in a bankruptcy and hence a creditor will find it difficult to claim them if someone files for one. Is Military Veteran’s Pension affected in a Chapter 7 Bankruptcy?
Usually Military Veteran’s Pension is exempt from bankruptcy subject to the condition that they are not funded for at least a year before the filing of a Chapter 7 Bankruptcy. If a company files for bankruptcy does the Employee’s Pension get affected?
Usually it does not get affected when a company files for bankruptcy because it is secured under the provisions of Employee Retirement Income Security Act (ERISA). The ERISA ensures that the plan has sufficient fund in it and it is kept aside from other assets of the company. In order to ensure that it is not affected when a company files for bankruptcy, it is kept in a separate trust or account. Is it possible to garnish a teacher’s pension to collect debt?
Usually a teacher’s pension is not garnished to collect debt. However, in case of collecting taxes or back child support it can be done. Is it possible in the State of Pennsylvania to use an individual’s pension for the collection of real estate taxes?
Regulations regarding pension are not uniform throughout the U.S. Different states have different rules. In Pennsylvania it may not be possible to garnish a person’s pension for the collection of debt. However, for the purpose of collecting back state taxes like real estate tax, garnishment might be used. It is essential to know how a bankruptcy might affect an individual’s pension plan. Without knowing it a person might suffer various problems leading to frustration and helplessness. They should know how their pension might be affected in case they file for bankruptcy or what the status would be when the company they had worked for goes bankrupt. In case difficulty arises as to how to tackle the situation, it is advisable to ask a bankruptcy lawyer to provide legal insight about the best course of action.
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