Will creditors try to reclaim debt from our pension lump sums?

NellieNewbie

We have been making £1 per month token payments to most of our creditors since 2009/10. None of them are actively chasing the full balance and the £1 just gets paid every month.

We're both 56 now and as we head towards retirement age, we have concerns about the lump sums payable from our works pensions. We still owe over £40k with no prospects of repaying it. Two lump sums left by parents already went into this black hole of debt and that broke our hearts to see the money being used this way.

Can anyone tell me if creditors do pursue pension lump sums to clear debts?

sourcrates

Hi,

They can pursue you through the courts at any time, should they choose to do so, they won't know about your pensions, do you own a property ?

They are unlikely to stay quiet for ever concidering the sums involved.

Post up an SOA as it's impossible to advise with only half a story.

nkkingston

Maybe book a Pensionwise appointment to see what's likely to happen. I know there's been some big court cases recently about pensions and bankruptcy (I think the ultimate, after many appeals, conclusion was that your creditors couldn't claim your pension pot if they made you bankrupt as long as you weren't going to draw on it soon - Horton vs Henry - but it's a different story if you make yourself bankrupt). However, if you just drew down the sums so they were sitting in your savings, I think creditors could put in a reasonable claim for them.

Pensions and debt is a very complicated area, so it's definitely something you want to get sorted before you retire.