Dealing With the Threat of Garnishment in Ohio

Although garnishment is unpleasant, it can largely be avoided in bankruptcy.

If you are delinquent on your bills, one of the ways that creditors can force you to pay is to garnish your wages. Garnishment is a process where a court orders your employer to set aside a portion of your wages to satisfy your debt. In addition, a creditor can garnish your bank accounts, which involves the bank turning over a portion of your account balance to your creditors. Although garnishment is an unpleasant process, it can be avoided.

Garnishment in Ohio

Garnishment is not a process that can occur without you knowing about it. In Ohio, a creditor must first file and win a lawsuit against you to obtain a judgment for the debt owed. Having obtained a judgment, the creditor can ask the court to garnish your wages (or bank accounts). Since you will receive notice of both the lawsuit and the request for garnishment, you will have plenty of opportunity to act.

Many people believe that garnishment allows creditors to take their entire paychecks. However, Ohio law limits the amount that may be deducted from your paycheck to 25 percent of your disposable income-the amount left over after taxes. In cases where you are paying child support, the maximum amount is even less.

Additionally, there are also limits on the kinds of income that may be garnished. Under Ohio law, creditors may not take the following proceeds from your bank account:

• Unemployment compensation
• Disability benefits
• Life insurance (or other insurance proceeds)
• Workers' compensation
• Up to $54,000 in pensions
• Social Security

What to do if you are facing garnishment

If you have received a notice that a creditor is seeking to garnish your wages (or bank accounts), it is important to act quickly. You may be able to avoid garnishment by contacting the creditor directly to work out a repayment plan that would allow you to avoid the process entirely.

However, many creditors may be unwilling to negotiate with you. If you are unable to work out a deal and cannot afford to pay the debt, bankruptcy may be the best solution for you. When you file bankruptcy, your creditors are automatically required to stop all collection lawsuits and garnishment proceedings against you. During bankruptcy, most, if not all, of the debt that is the subject of the garnishment is wiped away. Once you complete bankruptcy, you have a fresh start without fear of being garnished again for your pre-bankruptcy debts.

To learn more about the ways that you can avoid garnishment, it is helpful to contact an experienced bankruptcy attorney. An attorney can propose a solution that would best fit your unique situation.