Are Pension Benefits Exempt From Debt Collection?

By: Robert J. Nahoum

Are Pension Benefits Exempt From Debt Collection?


After falling on hard times debt collectors have been after you, some have even sued. A judgment has now been entered against you.  You are on a fixed budget and your only sources of income are social security and pension benefits?  You’re now wondering if the debt collector levy on your pension to satisfy the judgment

The Rule:

As in most states, New York has made the policy decision that people should not be left penniless by debt.  For this reason, certain assets and income have been selected as exempt from debt collection.  Included in those exemption are public and private pensions, retirement saving accounts (like (401(k), 403(b), and individual retirement Accounts (IRAs).

Similarly, under federal law, exemptions include public Assistance, Supplemental Security Income, Social Security, Social Security Disability, veterans benefits, child Support, Spousal Maintenance, Workers Compensation and Unemployment Insurance.


Be proactive, if you can show a debt collector that all of your property and income are exempt (called being “judgment proof”), show proof early on an avoid having to be harassed for money you just don’t have.

If a debt collector has frozen your bank account with exempt funds in it, be sure to fill out the “exemption claim form” that you should have received from your bank.  If you didn’t get the exemption claim form, call the bank or the attorneys for the debt collector right away and notify them that exempt funds have been improperly restrained.

If a debt collector does go after your exempt property, take a stand and fight back.  Such conduct might be a violation of Federal debt collection laws known as the Fair Debt Collection Practices Act (FDCPA for short).  If you’ve been the victim of an FDCPA violation, you can sue the debt collector for statutory damages up to $1,000.00, actual damages (like pain and suffering) and the debt collector may have to pay for your attorney.

If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.

The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202
[email protected]