Creditors could seek funds from retirement assets

Persons who save and invest might build up a sizable retirement account for their “golden years.” Many things could go wrong in a person’s life, and running into unexpected financial troubles could be among them. Such persons may owe significant sums of money to various creditors, and those creditors would surely seek to recover legitimate debts owed to them. Questions may arise regarding whether creditors may seize retirement assets to pay for outstanding debts in Michigan.

Debts, creditors, and retirement assets

Employer-sponsored accounts, such as 401(k) plans, pensions, and thrift savings accounts, are among the financial assets intended to help someone during retirement years. A person could have tremendous sums of money in those accounts, and a creditor owed $5,000 could inquire about placing a lien on the funds in those accounts.

Creditors might discover they cannot take assets from employment-based retirement accounts. Only the IRS may target these accounts.

Creditors seeking payment from debtors

Although the debtor might have money “protected” in employer-sponsored accounts, assets could be held elsewhere. Creditors may explore collection actions and civil judgments to recover their losses. Many will turn to creditor services that understand the law and how to perform the appropriate steps.