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Wage Garnishment in Ohio: What Consumers Should Know

What happens after a wage garnishment is paidLast updated April 28, 2017.

Say you’ve made some purchases on your credit card, and you owe a couple thousand dollars. Then something unexpected happens (maybe your roof starts leaking or your car needs new tires) and you find yourself a bit short one month. You plan to pay in full the next month, but the payment is too high with the interest and fees. You know that you have to make the minimum payment every month, but it’s hard to catch up once you get behind. With interest and fees accruing, the day may come when you can’t make the minimum payment.

When will my account go to collections?

When you miss a minimum payment, the credit card company will contact you about your default. They may send letters or call. They’ll try to work out a payment plan with you — they’d rather do that than deal with the hassle of collections. If you can’t come to an agreement about a payment plan or if you do start a plan but miss one or more payments, the credit card company will turn your debt over to a collections agency or a debt buyer. This whole process generally takes three to six months from your first missed payment.

What happens when my account has gone to collections?

First, expect the debt collectors to start contacting you immediately, and probably every day. They generally get paid based on what they collect, so they’re motivated. They’ll try to convince you to pay. If you can’t or won’t, they’ll sue. They’ll get a court judgment for the debt and then they’ll get a court order allowing them to garnish your bank accounts and wages or seize your property as payment.

When you’re sued for debt collection, you’ll receive notice of the lawsuit. In Ohio, you have 28 days to respond to the suit. You have two options:

If you believe that you don’t owe the money or that you owe less than you’re being sued for, you can file an answer explaining your position. You’ll send the answer in to the court and it will set a date for a hearing. At the hearing, you’ll go in person to explain to the judge why you either don’t owe the money or owe a different amount. You should bring all of the paperwork relating to the debt with you, including any communication between you and your creditor or the collection agency. After the judge has heard both sides of the story, she’ll enter a judgment either for you or for the creditor. The judge may decide that you don’t owe the debt (because it was an error in the first place or because you already paid it) or that you do owe a particular amount. You may be able to appeal, but the appeals process is long and expensive and you’re not guaranteed a different outcome.

If you don’t want to dispute the debt, you don’t have to file an answer. The court will find in favor of the creditor. This is called a “default judgment.” If default judgment is entered against you, you can’t appeal.

What does it mean if a collector has a judgment against me?

Whether you file an answer or not, the judgment is permanent. It means that the creditor has a concrete legal right to payment from you in the amount of the judgment. If you don’t pay up, your judgment creditor can ask the court for permission to take payment from you in several ways. They can levy your bank accounts or place a lien on your home. They can also garnish your wages.

When a creditor gets a levy against your bank account, your bank will freeze the account and release the funds in it to the court. You’ll receive notice of the levy. The notice will inform you of your right to a hearing to fight the levy; you’ll have to request that hearing by the deadline on the notice or the court will release the funds to your creditors. Creditors can claim anything in your accounts, but must leave you with at least $450. Ohio law protects, or “exempts,” that amount from seizure by creditors.

The Demand Letter and Wage Garnishment

When a creditor gets a court order against you for collection, it must send you a letter between 15 and 45 days after the judgment informing you of the judgment and listing your options: pay the debt or expect wage garnishment. That’s called a “demand letter.” You may be able to make a payment to the creditor and put the whole issue to rest. You may not, in which case your creditor will likely attempt to garnish your wages.

When a creditor garnishes your wages, your employer will receive a court order stating that a certain amount of your wages must be withheld and paid to the creditor. Your employer doesn’t have a choice in the matter — they’re on the legal hook if they don’t comply. You can avoid formal garnishment by agreeing to voluntarily pay the amount that would have been garnished. You’re still out that much cash but the garnishment won’t show up on your credit report, saving you a few points on your credit score. If you fail to make the voluntary payments, your creditor will simply initiate formal garnishment.

When you receive the demand letter, you can pay up or expect garnishment. However, you also have two other options: you can apply for a city or county trustee to manage your debt repayment or you can retain a credit counseling service. If you apply for a trustee, you’ll make voluntary payments of the amount that would have been garnished to the trustee. The trustee will then distribute that amount among your creditors until your debts are repaid. If you use a credit counseling service, the service will negotiate a payment plan with your creditors. Once they agree to the plan, they can’t garnish your wages.

In either case, if you miss a payment, you’ll be stuck with wage garnishment again. If you can keep up with voluntary payments, however, either of these is a better option than wage garnishment, which has a serious effect on your credit score.

When you receive notice of wage garnishment, you have one last chance to dispute it. Under Ohio law, some sources of income are completely exempt from wage garnishment. These include Social Security retirement or disability benefits, unemployment benefits, and worker’s compensation. In general, most government-provided benefits are exempt. If some or all of your income comes from exempt sources, you can dispute the wage garnishment notice and request a hearing. The notice will include the information and forms you need to dispute the garnishment. Make sure to respond within the time listed on the notice or you will lose your chance to dispute the garnishment.

At the hearing, you’ll have a chance to show the court that your income is exempt. You’ll need to provide proof that you do, in fact, have income in the reported amount from an exempt source (documentation of your Social Security benefits, for example). If all of your income is exempt, you’re completely protected from wage garnishment. At the very least, your exempt income is safe.

What can a debt collector in Ohio take?

It can be frightening to deal with the aggressive tactics of debt collectors even before they have a legal judgment against you. Once judgment is issued, it can be even worse. You legally owe the debt and they legally have the right to collect, even if it means taking the car out of your driveway and the cash out of your checking account. If you have non-exempt income, they can take that, too. Thankfully, while the law gives them the means to collect what you owe, it also protects some of your assets.

In Ohio, a debt collector may only garnish up to 25% of your non-exempt wages and must leave at least $425 in your bank account. They also may not seize a vehicle worth less than $3,225. Better yet, the law protects $125,000 in home equity from creditors and $10,775 in aggregate value of household goods. The law also protects an additional $1,225 in equity if other exemptions aren’t enough to cover you (please note that these values change based on inflation every three years). Ohio R.C. § 2329.66. Finally, your government benefits are exempt. Creditors can’t seize any part of your Social Security, workers’ compensation, spousal or child support, pensions, veterans benefits, or any other state or federal program benefits.

Compared to the protections offered in the rest of the nation, Ohio falls somewhere in the middle. An individual earning minimum wage will be left with only $235 weekly if collectors garnish 25% of his wages — that’s about $65 under the federal poverty level for a couple and only half the federal poverty level for a family of four. Ohio offers better-than-average protection of home equity and household goods, but leaving only $425 in a debtor’s bank account and seizing any vehicles worth more than $3,450 leaves debtors with very little if they don’t own a home. Many consumer advocates suggest that the law doesn’t do enough to protect debtors in Ohio.

Wage garnishment is a difficult situation, but the law still protects your rights. You may need to object to wage garnishment if your creditors are acting inappropriately. If the creditor is taking too much money from your check, you should object to the garnishment in writing to the court. You should also object if you’ve already paid the debt in full but the garnishment has continued. Finally, you should object if the creditor did not follow proper procedure. For example, a creditor that failed to send you a demand letter has no right to garnish your wages and the court will ensure that the garnishment stops.

If you’re facing collections and you’re out of options, consider filing for bankruptcy. When you file for bankruptcy, you invoke the protection of the automatic stay. The automatic stay will stop all collection actions and foreclosure processes against you for the duration of the bankruptcy. It can give you the room you need to get your finances back on track. You will likely be able to keep most, if not all, of your important assets and at the end of the bankruptcy process, your remaining unsecured debt will be discharged. That means it’s forgiven and you won’t have to face the threat of debt collectors again.

If you’re struggling with debt and debt collectors, speak with an experienced bankruptcy attorney. He or she can help protect your rights from debt collectors and can work with you to determine the best options for your financial future. Contact us today — we’ll be happy to help you!

Russ B. Cope is dedicated to legal standards that go far beyond filing cases — he is interested in your goals. Russ wants to be certain that each client is making an informed decision that will make their life better, and thrives on the interaction between lawyer and client.

wiseGEEK: What does a "Writ of Garnishment" Mean?

A writ of garnishment is issued when it has been determined that a person must pay out funds to another party, often on a regular basis, with the money being removed directly from paid wages. It automatically removes funds from a person's bank account and awards those funds to the other party. Several circumstances can lead to a writ being issued, but in most cases, a court order is necessary for the garnishment to occur.

One common circumstance that can lead to a writ of garnishment is when a defendant has failed to pay debts such as credit card bills or other longstanding debts. In these cases, the other party or corporation can sue for the money it is owed. The results of the lawsuit can lead to a court order for garnishment of wages.

In cases where a writ has been issued, the debtor's employer is required to abide by the terms of the court order and will have no choice but to garnish the person's wages. It is not possible for the employee to negotiate with his employer to avoid this. It is, however, possible to negotiate with a creditor to modify payment schedules and agreements before the garnishment becomes necessary.

Another circumstance that sometimes leads to a similar court order is failure to pay child support. A party who has not received child support can file suit and receive a court order that will lead to wage garnishment in order to obtain the funds that are due. The exact execution of a writ of garnishment is determined by the specifications of the court order. Funds can be removed in a single payment or on a regular basis until the debt is judged to be fully paid.

Similar to a writ of garnishment is a writ of attachment. This legal term refers to seizure of property, with this seized property functioning to repay a debt or satisfy a previous contract that was not upheld. A writ of attachment generally is issued to law enforcement personnel, giving them authority to seize the asset in question. Typically, it is also issued as a result of a court decision, although it can sometimes be used to freeze assets before the court case has been decided. This measure usually is taken only if a defendant is suspected of fraud or is likely to remove or hide assets before the court can determine how the assets should be distributed.

3) @Valencia - The bankruptcy route is fine if your friend is eligible. There are particular conditions applicants must meet, including being able to prove they can really pay back what is agreed.

If someone makes an application for a writ of garnishment against her salary she would need to prove extreme financial hardship. Obviously this means her income is low and she owns nothing much property wise.

You can see that these two options are pretty much polar opposites, so it's a case of jumping one way or the other. Whatever happens, I would be steering her towards some kind of financial counseling.

2) My best friend is having major financial issues, following a period of reckless spending and the unexpected loss of her job.

She has now found work in another state, but is considering the bankruptcy 13 option, as she doesn't earn enough to pay what each creditor wants. Having someone take money directly from her salary seems to be an equally unworkable solution.

I have advised her to research any garnishment exemptions that exist, as a temporary measure, but so far she hasn't come up with anything. Is there anything else I can do to help her?

1) If you can, I recommend you do your best to avoid getting your employers involved with your debt issues.

Recently I had to have a meeting with a very irate boss, who was waving a writ of garnishment form around and clearly expressing his disappointment in me. I am pretty sure that this will affect my chances for promotion, as I look like someone who can't manage their life properly.

So if you have the chance to make an agreement with the people you owe, do it! I wish I could turn back time and take that opportunity myself.

Tax Matters - The Top Tax Defenders Blog

By Top Tax Staff | Nov 25, 2015 7:00:00 AM | IRS Collections

Creditors are ready to take whatever steps are necessary to collect on money that is owed to them. When you are unable to pay off a debt entirely, your creditor may petition the court to have your wages garnished.

For many people, wage garnishments result in serious financial hardships that leave them unable to care for their families. You can fight a levy against your income by asking the court for an exemption hearing. You should then prepare for your hearing by keeping these important tips in mind.

  • You are your family's head of household and primary income earner
  • You provide at least 50 percent of the support for children or other dependents in your household
  • You have already paid the debt in full
  • You have payment arrangements set up with the creditor and you have not defaulted on the agreement
  • You are filing for bankruptcy
All of these factors are legitimate reasons for the court to consider lowering the amount that you owe or eliminating your debt to the creditor entirely. You must show written, documented proof of these factors, however. The judge will not take your word for any of these reasons. You must bring along paperwork to back up your arguments in court.

  • Your case number
  • Your full legal name
  • Your address and telephone number
  • A calculation of your exemptions
  • Your formal petition asking for the garnishment to be lowered or eliminated
You should then sign your written request and submit it to the court's clerk. The clerk will then notify you in writing if your petition was accepted and on what date the hearing will be held. It is vital that you show up to the hearing on time and with all of the required documented proof if you want your case to heard. Some of the proof that you might need to bring with you include:

  • Paycheck stubs
  • Receipts of payments that you have made on the debt
  • Proof of your dependents and exemptions
  • Proof of your bankruptcy filing if your attorney has yet to notify the court or your creditors

If you are filing for bankruptcy, your bankruptcy attorney could appear on your behalf. It is illegal for creditors to contact, harass, or try to collect debts from debtors during bankruptcy proceedings.

What is garnishment after a judgment when I’ve been sued by a creditor or debt collector?

Garnishment is a scary word for good reason — it means a judgment in Alabama has been entered against you and someone is trying to take your wages and/or the money in your bank account.

  • Talk about how we get to the garnishment stage
  • What is a wage garnishment
  • What is a bank garnishment
  • What your options are to attack the judgment
  • What your options are in dealing with the garnishment

How did we get to the garnishment stage?

You got sued by a creditor or by a debt collector/debt buyer.

Then you were served.

And either you did not respond in time and got a default judgment or you did respond but later lost the case.

This is where the company with the judgment against you takes about 25% of your wages every paycheck. While there are some exemptions that can be argued, the bottom line is this is devastating for almost anyone to lose a quarter of their paycheck every pay period.

Your bank gets hit instead of your paycheck. But instead of 25%, it is all that is in your bank account. Unless you have “exempt” funds such as Social Security funds, you can lose everything in your account.

What your options are to attack the judgment?

If you weren’t properly served, you can attack the judgment. You can do this because it is a requirement that you are served for a judgment to be valid.

If you were served, you can still ask the court to set aside the judgment but normally you only have either 14 or 30 days to do this from the date of the judgment (Small Claims and District is 14 days and Circuit Court is 30 days).

What your options are in dealing with the garnishment?

If you can’t get rid of the judgment, then here are your options:

  • Let the garnishments happen until the judgment amount (plus continuing interest) is paid off
  • File bankruptcy to possibly get rid of the judgment or put it into a chapter 13 bankruptcy
  • Work out a payment plan that is less than the garnishment amount
  • Work out a lump sum payment plan to save on the total amount paid

We help people every week with judgments and I’ll be glad to help you think through your options. You’ll leave the conversation with your options and you can then decide what is best for you.

Call us at 205-879-2447 or click the button below to get with us.