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MIAMILAW1127, Lawyer
Category: Employment Law
Satisfied Customers: 755
Experience:  Founding Partner at Moises Law, P.A.
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I took out what i believed was a loan against or secured by

Customer Question

I took out what i believed was a loan against or secured by my pension. I was very ill at the time and now have been made aware that i sold not borrowed part of my pension for $3000 snd must pay back almost $16,000 in the course of five years with monthly payments i cannot afford. I live in texas. If i file bankrultcy, is my pension protected from this. I really thought it was a loan?
Submitted: 1 year ago.
Category: Employment Law
Expert:  MIAMILAW1127 replied 1 year ago.

Hello. I am going to assist you with your questions this evening.

The short answer is that Congress overhauled the bankruptcy laws in 2005. Under the new law, virtually all retirement account and pension plan funds are exempt from creditors, meaning you get to keep them if you file for Chapter 7 bankruptcy. In Chapter 13 bankruptcy, because your retirement accounts are exempt, they won't affect how much you must repay unsecured creditors.

In other words, you should be ok.

Please don't forget to rate my answer at your convenience. Thank you.

Customer: replied 1 year ago.
I dont think i was clear. When i got the paperwork it was not a loan at all but a purchase and sale agreement of most of my pension stream for 5 years using my pension like security. I found out later this is how they are getting away with it. I was very cleverly scammed. So now its like i sold my pension stream for five years. Congress and certain states have shut these companies down, but not in texas. Do you know of these companies? The one i got scammed by is called future income payments llc out of california. So i am not sure my pension is secure. With all my other debt without that income i am not sure i will qualify for chapter 13 as my only other source of income is social security disability.
Expert:  MIAMILAW1127 replied 1 year ago.

Thank you. That explanation really did clear things up.

You have the option of trying to sue them for fraud/misrepresentation to try to get out of the obligation. Otherwise, unfortunately it seems that you would be bound by the agreement you signed for the next 5 years. You would basically need to prove that the purchase and sale agreement is invalid to be able to get out of it.

You can also try calling the Texas Department of Consumer Affairs to see what their approach to these types of companies is. You may be able to file a complaint with them and begin an investigation.