• filter:

Help! Credit card debt - can my IRA be garnished?

  • Page :
  • 1
  • Text Only
  • Search this Topic »
Voting History
rated:
I owe around $20k in credit card debt - my business fell on hard times since the last 3 years and income trickled down to basically just being able to pay the essentials. I got sued by Amex and they garnished around $5k from my checkings account (leaving a total of $100 available) I do have around $30k in my traditional IRA and I'm very worried that it could be garnished. Can they do this? Should I file for chapter 7 bankruptcy? I did call a few months back to try and arrange for a payment plan but they were adamant about me having to pay the $5k as a downpayment and the rest in installments. Please help!

Member Summary
Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

rated:
almabtorres said:   I owe around $20k in credit card debt - my business fell on hard times since the last 3 years and income trickled down to basically just being able to pay the essentials. I got sued by Amex and they garnished around $5k from my checkings account (leaving a total of $100 available) I do have around $30k in my traditional IRA and I'm very worried that it could be garnished. Can they do this? Should I file for chapter 7 bankruptcy? I did call a few months back to try and arrange for a payment plan but they were adamant about me having to pay the $5k as a downpayment and the rest in installments. Please help!
  Depends on state. Can creditors garnish my IRA?
 

rated:
fwuser12 said:   
almabtorres said:   I owe around $20k in credit card debt - my business fell on hard times since the last 3 years and income trickled down to basically just being able to pay the essentials. I got sued by Amex and they garnished around $5k from my checkings account (leaving a total of $100 available) I do have around $30k in my traditional IRA and I'm very worried that it could be garnished. Can they do this? Should I file for chapter 7 bankruptcy? I did call a few months back to try and arrange for a payment plan but they were adamant about me having to pay the $5k as a downpayment and the rest in installments. Please help!
  Depends on state. Can creditors garnish my IRA

  
It's California, so yes it can be garnished - but I don't see anything about credit card debt. I mostly see garnishment for owing federal debt (taxes) 

rated:
You set up your business in your personal name?

As the saying goes, don't mix business with pleasure.

rated:
AMEX probably requires a personal guarantee unless your business is well established.

rated:
How are you on your other debts? If it's just one debt of $20k than making arrangements to start paying would be your best bet. If you have fallen behind on your car, mortgage, and other debts it might be time to seek the advice of a BK attorney to protect your retirement assets. BK sheltered all of my retirement assets and has allowed me to rebuild with out the huge burdens of business debts I accrued while opening and closing a restaurant in 2009-2010. I waited almost 4 years before filing, it's amazing once they started to garnish my wages I was able to make time to get BK started.

rated:
I'm a sole proprietor - work from home, I have had those cards since 2006 and have always paid on time. Just as my business was starting to recover slowly, I get hit with this garnishment, ugh. letspendlotsofmoney - I don't have any other debts. Car is paid off, I don't own a home. My IRA currently has investments which are locked in active trades, so I'm quite worried if those will be liquidated. If they will go after my IRA I will seriously consider filing bankruptcy.

rated:
I'd consult with a BK lawyer,  although 20k isn't an impossible amount of money to come up with from working or cutting expenses. Unfortunately, you should have started thinking about BK before Amex got a judgment against you. It just cost you $5000 cash that might have been delayed or discharged in bankruptcy. Sorry.

rated:
OP, do you owe $20k before or after the $5k that AMEX garnished from your checking account?

Anyway, is a BK strike worth $15k or $20k?

rated:
NoMoneyInMyWallet said:   OP, do you owe $20k before or after the $5k that AMEX garnished from your checking account?

Anyway, is a BK strike worth $15k or $20k?

  Before the $5k garnished from my checkings. I've always looked at BK as something never to be looked at, even as a last resort. Unfortunately the possibility of them going in my IRA and selling active positions to recover the rest is really worrisome  

rated:
Credit boards dot com is probably the best venue to debate whether to pay, default, settle, or file bankruptcy. There are literally hundreds of pages of debate about the merits of each action over there.

rated:
TravelerMSY said:   Credit boards dot com is probably the best venue to debate whether to pay, default, settle, or file bankruptcy. There are literally hundreds of pages of debate about the merits of each action over there.
  
Thank you!

rated:
almabtorres said:   
NoMoneyInMyWallet said:   OP, do you owe $20k before or after the $5k that AMEX garnished from your checking account?

Anyway, is a BK strike worth $15k or $20k?

  Before the $5k garnished from my checkings. I've always looked at BK as something never to be looked at, even as a last resort. Unfortunately the possibility of them going in my IRA and selling active positions to recover the rest is really worrisome

This point about "selling active positions" makes it sound like you have an emotional stake in some of your IRA investments, which is probably a bad idea.  

rated:
BrianGa said:   
almabtorres said:   
NoMoneyInMyWallet said:   OP, do you owe $20k before or after the $5k that AMEX garnished from your checking account?

Anyway, is a BK strike worth $15k or $20k?

  Before the $5k garnished from my checkings. I've always looked at BK as something never to be looked at, even as a last resort. Unfortunately the possibility of them going in my IRA and selling active positions to recover the rest is really worrisome

This point about "selling active positions" makes it sound like you have an emotional stake in some of your IRA investments, which is probably a bad idea.  

  
Emotional? No, not really - profitable would be the more accurate term. However, there is potential for more upside in the coming months so if these are liquidated..
 

rated:
PYBDB

rated:
meade18 said:   PYBDB
  

Yeah, thanks.. been doing that since 2004. I guess I created my hardships on purpose.. 

rated:
almabtorres said:   
meade18 said:   PYBDB
  

Yeah, thanks.. been doing that since 2004. I guess I created my hardships on purpose.. 


I didn't say anything about your hardships. Your post is about your IRA being garnished because you haven't paid your bills. You have the money to pay them. The money just happens to be in an IRA. Just because it's retirement money doesn't make it sacred. You can pay your bills.

rated:
Did you go to the hearing or was it a default judgement?

rated:
almabtorres said:   I owe around $20k in credit card debt - my business fell on hard times since the last 3 years and income trickled down to basically just being able to pay the essentials. I got sued by Amex and they garnished around $5k from my checkings account (leaving a total of $100 available) I do have around $30k in my traditional IRA and I'm very worried that it could be garnished. Can they do this? Should I file for chapter 7 bankruptcy? I did call a few months back to try and arrange for a payment plan but they were adamant about me having to pay the $5k as a downpayment and the rest in installments. Please help!
  So, seems like you already paid the 5k down payment that they were asking for. Could you set up a payment plan now?

Other options might be bankruptcy as you mentioned or offering to settle for less. Probably other options as well that I'm not aware of. Do they know where your IRA is?

No one can answer a question of what you should do without more detailed information like how much could you pay on the account each month now? What's your total income? How old are you?

  • Quick Reply:  Have something quick to contribute? Just reply below and you're done! hide Quick Reply
     
    Click here for full-featured reply.


Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017