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You may do either - cash out vested portion of your retirement plan or roll it over to a new employer's retirement plan or roll it over to the IRA account.
To cash it - you need to contact the administrator of your retirement plan - please be aware that distributed amount likely will be your taxable income plus additional 10% early distribution penalty will apply.
To roll the funds over - you need to contact the administrator of the new plan and provide the information about your current plan - contacts, last statements, etc. You will be asked to fill transfer forms and they will do the rest. The direct roll over will not be taxable event.
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No unless you agree - the employer may not garnish your funds in any other way - but - to sue you and only based on the court order.
If the employer withhold your debt - you may file a complain to Department of Labor for improper wage garnishments.
Please find in this publication provided by the DOL a brief description of wage garnishment laws - http://www.dol.gov/esa/regs/compliance/whd/whdfs30.pdf