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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Employment Law
Satisfied Customers: 27682
Experience:  Former judicial law clerk, lawyer
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I am retired & receive a pension from the University of

Customer Question

I am retired & receive a pension from the University of Missoluri. Is that monthly pension subject to garnishment should I default on a mortgage payment, do a deed in lieu back to the mortgage company? Can any other creditor garnish any part of that pension?
If the pension is subject to garnishment, would it help to establish a trust of some sort so the pension was paid to the trust rather than directly to my name?
I also receive a monthly social security check. Is that subject to garnishment?
Submitted: 5 months ago.
Category: Employment Law
Expert:  Lucy, Esq. replied 5 months ago.

Hi,

I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear about your dilemma.

Pensions and social security are exempt from garnishment for most kind of debts. The exception is monies owed to the federal government, alimony, and child support. The bank that has your mortgage will not be able to take your pension or social security if you fall behind on payments. They will be able to foreclose, but they won't have any ability to collect extra money from you. As part of foreclosure, they're entitled to their attorney's fees, so you still may not be able to keep the current equity in the home.

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Customer: replied 5 months ago.
Thank you for your reply. It is very helpful. One further question, in case of a divorce would it be smart to establish a trust of some sort & have the pension paid to the trust in order to not have it subject to alimony should a divorce occur?
Expert:  Lucy, Esq. replied 5 months ago.

In the event of a divorce, your spouse would be able to get a court order that requires the pension company to direct some portion of your pension to her, based on how long you're married and how long you worked for the company during the marriage. A trust wouldn't allow you to avoid that, because your pension is considered a marital asset, as is any pension or retirement accounts your spouse has.

Expert:  Lucy, Esq. replied 5 months ago.

Did you have any other questions about this?