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Financial hardship

Having the option of taking an in-service withdrawal from your TSP account can be a lifesaver when you’re facing a financial hardship. But before you do, evaluate your options carefully and know the consequences.

Tax considerations

Spousal rights

For detailed information about financial hardship withdrawal eligibility and application rules, read In-Service Withdrawals.


The funds in your TSP account are held in trust for you by the TSP and, by law, are protected from the claims of creditors. Your TSP account cannot be garnished to pay debts.

A chapter 7 bankruptcy action does not affect your ability to obtain a financial hardship in-service withdrawal.

Under chapter 13 of the bankruptcy code, you are only eligible to receive a financial hardship in-service withdrawal if you have unpaid medical expenses, a casualty loss, or unpaid legal fees incurred for a separation or divorce.

For detailed information about the effect of a bankruptcy on your TSP account, see the TSP fact sheet, Bankruptcy Information.