In Ohio, if you become delinquent on your debts, you may face the threat of a creditor garnishing your wages. Wage garnishment is an order from the court that instructs your employer to withhold a portion of your wages, to be paid later towards your outstanding debts.
When may garnishment occur?
Since your creditors cannot garnish your wages without first obtaining a court order, garnishment is not something that can occur without you having prior notice of it. In most cases, creditors may not garnish your wages until they have sued you in court, obtained a judgment against you and asked to court to approve an order of garnishment. However, a court order is not necessary in order to begin the garnishment of certain debts. These debts include student loans, tax debt and child support.
What assets may be garnished?
In addition to your paycheck, your creditors may seek to garnish your bank account. However, Ohio and federal law protects certain assets from being garnished such as:
· Workers' compensation benefits
· Insurance proceeds
· Unemployment compensation
· Veterans' benefits
· Social Security
· Disability payments
· Up to $50,000 of pension proceeds
Are there any limitations on how much can be taken?
Fortunately, creditors may not take your entire paycheck while you are being garnished. Ohio law sets the maximum amount of your paycheck to 25 percent of your net take home pay, which is the amount left over after taxes and other deductions have been taken out. Creditors may be limited to taking less than that, if you are currently paying child support.
How can you stop garnishment?
You will have prior notice of any garnishment attempts in most cases, so you will have time to take action to stop it. One way of doing this is to contact the creditor that is garnishing you and try to work out a payment plan. However, be advised that this method is not always successful, as your creditor may choose not to work with you. Unfortunately, they are not legally required to do so.
If you are unable to reach an agreement, it may be worthwhile to consider bankruptcy, if you lack the financial resources to pay your debts. Once you file bankruptcy, all garnishments against you are immediately halted by the automatic stay. As you complete the bankruptcy process, many of your debts, including those that are the subject of garnishment, are eliminated.
Since bankruptcy is a complex process, it is important to have the advice of an experienced bankruptcy attorney before you file. An attorney can evaluate your unique situation and advise you on the best way back to financial health.