When you owe money and don't repay it, your creditor can take you to court and obtain a judgment against you. With a judgment in hand, your creditor has a number of options for collecting the debt. One option is to garnish your wages and other income, subject to certain restrictions. The state of Florida not only protects retirement income from garnishment, it shields all the income earned by a head of household.
Head of Household
All wages and other earned income of a head of household are protected from garnishment in Florida. Florida defines "head of household" as someone who provides at least 50 percent financial support to a person he's legally obligated to support, such as a child, spouse or parent. The lone exception to the head of household rule is when the debtor's net wages are more than $500 per week and he has agreed in writing to allow his income to be garnished.
Social Security
Under federal law, Social Security income can only be garnished for child support, alimony and federal tax debt. Florida takes the protection a step further, exempting Social Security income from garnishment no matter the source of the debt.
Pensions
Pensions for government employees such as teachers, firefighters, police officers and state workers are also shielded from garnishment by creditors. Retirees who collect pension benefits from private employers are protected, too, as are residents who receive income from annuities purchased in Florida.
Qualified Retirement Plans
Florida exempts income from qualified retirement plans, such as 401k's and 403b's from garnishment, as well as IRA income. This is true for all types of individual retirement accounts, including rollover and inherited IRA's.
Statutes of Limitations
A creditor must win a lawsuit against you before it has the right to collect a debt without your consent. In Florida, a creditor has four years to sue you to collect on an open account such as a credit card, and it has five years to sue you for a debt based on a written contract. Once a creditor has a judgment against you from a Florida court, state law gives it 20 years to collect.
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