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Does credit card debt affect your pension?

I have a lot of credit card debt.

asked by Bina (7)

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Tags:  debt  retirement

answers

The general answer is no, Social Security and most private pension plans are exempt from garnishment. Check your home state website for specific rules and regulations or to report a creditor that threatens to garnish your income from these sources.

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posted by Karen54 (812)
7 votes

Your penison is paid to you regardless of how much you owe to third parties, such as credit card companies. The amount you are entitled to receive on a montly basis is not calculated based on your credit card debt, but an established formula set forth in the pension itself.

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posted by epglaw (546)
5 votes

The amount of credit card debt you have should have no effect on the amount of pension you receive. Your pension is based on your time of service and the amount that you have accrued into your pension plan. The only problem credit debt will cause you is that your payments will be excessive.

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posted by Kurt (3028)
5 votes

If your debt goes into default and you are sued for garnishment, it can be collected from your pension and bank account. Otherwise, you have to pay off the credit card debt out of your pension like any other bill.

5 votes

Credit card debt can definitely affect a person's pension because accumulated credit card debt reduces a person's spending power. Even if a person is only making minimum payments, those minimum payments will affect your ability to use your pension if the credit card debt is high enough. Setting a goal of being debt free at retirement is really important.

4 votes

The debt from your credit card can affect your pension if the credit card company decides to take you to court and garnish your wages. They can also take you to court and sue you for your money.

3 votes

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