Can Social Security or Military Retirement Income be Used to Pay Creditors?
Those items are generally exempt from garnishment, except in cases of support payments. Different exemptions apply depending on whether you claim bankruptcy or not. The following are WV state exemptions, which do not apply to debts for a purchase money mortgage:
§ 38-8-1. Exemptions of personal property.
(a) Any individual residing in this state or the dependent of such
individual may set apart and hold as exempt from execution or other
process the following personal property:
(1) Such individual's interest, not to exceed five thousand dollars in
value, in one motor vehicle;
(2) Such individual's interest, not to exceed eight thousand dollars in
aggregate value, in household goods, furniture, toys, animals,
appliances, books and wearing apparel that are held primarily for the
personal, family or household use of such individual;
(3) Such individual's aggregate interest, not to exceed three thousand
dollars, in any implements, professional books or tools of such
(4) Such individual's funds on deposit in a federally insured financial
institution, wages or salary, not to exceed the greater of: (i) One
thousand dollars; or (ii) one hundred twenty-five percent of the amount
of the annualized federal poverty level of such individual's household
divided by the number of pay periods for such individual per year; and
(5) Funds on deposit in an individual retirement account (IRA),
including a simplified employee pension (SEP), in the name of such
individual: Provided, That the amount is exempt only to the extent it is
not or has not been subject to an excise or other tax on excess
contributions under Section 4973 or Section 4979 of the Internal Revenue
Code of 1986, or both sections, or any successor provisions, regardless
of whether the tax is or has been paid.
(b) Notwithstanding the foregoing, in no case may an individual
residing in this state or the dependent of such individual exempt from
execution or other process more than fifteen thousand dollars in the
aggregate in personal property listed in subdivisions (1), (2), (3) and
(4), subsection (a) of this section.
§ 38-8-11. No exemption from claims for child or spousal support,
purchase money or taxes.
No exemption claimed under the preceding sections of this article, or
any of them, shall affect or impair any claim for child or spousal.
support established or enforced under the provisions of
chapter forty-eight. of this code, the purchase money of the personal estate in
respect to which such exemption is claimed, or any proceeding for the
collection of taxes, or county or district or municipal levies. Any
increase in the exemption provided by a prior enactment of other
sections of this article are not applicable to liens and all other debts and
liabilities contracted and incurred prior to the effective date of the
prior enactment of those sections.
Exempt property is that property of the debtor that does not become part of the bankruptcy estate. When a debtor files for bankruptcy protection, certain assets of the debtor become part of the bankruptcy estate and are disposed of by the trustee and the proceeds are used to pay off the debtor's unsecured creditors. Property that is retained by the debtor (exempt property) include:
The debtor's right to receive -
a social security benefit, unemployment compensation, or a local public assistance benefit;
a veterans' benefit;
a disability, illness, or unemployment benefit;
alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
a payment under a stock bonus, pension, profitsharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor,
such plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor's rights under such plan or contract arose;
such payment is on account of age or length of service; and
such plan or contract does not qualify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code of 1986.