If you live in Ohio and a creditor gets a judgment against you, that judgment creditor may be able to collect from your retirement account (often called attaching your account). In Ohio, some retirement accounts are protected, others are not, and some get partial protection. A judgment creditor's ability to get your retirement account in Ohio depends on what type of retirement account you have and how much you have in it.
(Learn about other ways that judgment creditors can collect from you.)
Federal law prohibits judgment creditors from going after money in a pension plan that was set up under the Employee Retirement Income Security Act (ERISA). To be protected against creditors, your ERISA account must be either a qualified retirement plan or an employee welfare benefit plan covered by ERISA.
Examples of ERISA-qualified pension plans and benefit plans covered by ERISA include:
pension and profit-sharing plans
group health and life insurance plans
dental and vision plans, and
HRAs, HSAs, and accidental death or disability benefits.
There are circumstances when a judgment creditor may be able to get to your ERISA account, such as for a domestic relation order for spousal or child support (called a “QDRO”), or an IRS tax garnishment.
To learn more about ERISA-qualified retirement accounts, their protection from judgment creditors, and the exceptions to that protection, see Can Judgment Creditors Go After My Retirement Accounts?
If you have certain non-ERISA retirement accounts, then Ohio law fully exempts them from garnishment and other claims by a judgment creditor. Types of non-ERISA accounts that are protected by Ohio law include:
Roth IRAs, and
Your IRA may not be fully protected. If you owe child support, then Ohio law will allow your entire IRA account to be used to satisfy child support orders. Also, if you intentionally transfer money into an IRA account to keep that money from creditors (called a fraudulent transfer), then that IRA may still be subject to attachment by a judgment creditor.
In Ohio, not all IRAs are safe from the reach of creditors. Judgment creditors can still get to the following non-ERISA retirement accounts:
SIMPLE IRAs, and
Simplified Employee Pension (SEP) Plans.
There is a way you can protect your funds in a SIMPLE or SEP account. If you roll over funds into an IRA or other retirement account that is fully protected under Ohio law, then those funds become exempt.
Ohio provides partial protection for retirement funds held in a Keogh account. You can exempt (or set aside from the claims of creditors) an amount “reasonably necessary for the support” of you and your dependents. Since there is no single rule that applies to everybody who has a Keogh plan, the following factors will be considered:
your current and future income from all sources (not just employment)
your current and future living expenses
age and health of you and your dependents
your ability to continue working and make a living
your education, job skills, and training
your other assets and whether they can be liquidated or sold
your ability to save more money for retirement
the amount of your other debts and financial obligations, and
special needs of you or your dependents.
If you live in Ohio and have a non-exempt, non-ERISA retirement account that a judgment creditor is trying to attach, you may wish to consider filing bankruptcy. This is because bankruptcy laws may allow you to protect around $1 million of your retirement savings, while still affording you relief from your creditors. To learn more, including whether you qualify for bankruptcy protection, visit Nolo's Bankruptcy topic area.