If you owe money to a creditor, he may be able to obtain a judgment against you, which he can use to garnish your wages and other income. However, if you receive certain types of pension income, it may be exempt from garnishment in most states, including Virginia.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act protects most federal benefits from garnishment. Under this law, Social Security retirement benefits, federal retirement benefits, civil service retirement benefits, military retirement benefits, railroad retirement benefits and foreign service retirement benefits aren't subject to garnishment for most debts in any state. However, if you have certain types of debt, your federal benefits may be subject to garnishment. These debts include unpaid child support, unpaid spousal maintenance, federal and state tax debts and delinquent student loans.
Virginia Law
Because the Fair Debt Collection Practices Act protects benefits in all states, Virginia must comply with it. However, Virginia also protects other types of retirement benefits from garnishment for debts. Under Virginia law, an individual's interest in a retirement plan is exempt from garnishment by most creditors regardless of whether the individual is a participant, beneficiary or alternate payee. However, Virginia laws don't protect retirement plans from garnishment for child support or spousal maintenance, garnishment under a qualified domestic relations order or garnishment to repay tax debts.
Exceptions
If a retirement plan provides an annual benefit that exceeds $25,000, the excess amount isn't exempt from garnishment for debts in Virginia. If an individual has more than one retirement plan, the portion of the combined annual benefit that exceeds $25,000 is subject to garnishment. If two married individuals have interest in the same retirement plan and are subject to garnishment for the same debt, the annual benefit that exceeds $25,000 is still subject to garnishment even though the plan belongs to more than one debtor.
Considerations
To exempt your income from garnishment in Virginia, you must complete the Request for Hearing Garnishment Exemption Claim. On this form, you must indicate which types of exemptions you can claim. You can request to exempt certain types of retirement income by checking the box on line 20. After you submit the form, you must attend a hearing to validate your claims.
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