For South Carolina residents, can creditors force someone to raid a retirement account, whether 401k, 403b, IRA, SEP, Railroad, Government or other pension?

If a qualified ERISA plan (The Employee Retirement Income Security Act) the answer is no. That is because South Carolina law prevents creditors from attaching these accounts. Filing bankruptcy, strictly speaking, doesn’t “save” retirement accounts in South Carolina.Bankruptcy CAN simplify life and prevent creditor harassment at any time, and this can increase your quality of life during retirement.

We have seen lawyers try to scare people by advertising that bankruptcy can “save their retirement.” Don’t fall prey to this advertising technique.

Because pension plans are protected under South Carolina law, creditors can’t raid your retirement piggy bank, and creditors cannot make you withdraw money from them, before you retire, to pay debts. It is a common, but understandable mistake we see our clients make when they withdraw money from, or borrow money against their retirement accounts while they are still working in order to pay debt: What we see over-and-over is that a person has pressure in one part of their finances, and uses retirement money to ease the pain of their debt.

It is very important that you don’t make this mistake! If you have debt problems, please call The Compton Law Firm at 864-942-0518 for an appointment BEFORE you raid retirement funds to pay creditors. If you have already taken a loan against your retirement account, we may be able to make paying that back easier for you. Let us review your unique debt structure and give you the benefit of our 45 plus years of combined experience practicing Bankruptcy to find the best answer for you to deal with your creditors.

Who knows? You may not even need to file for bankruptcy.


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