How To Protect Yourself From Wage Garnishment In Ohio
If you have ever gotten behind on your bills, you may have received a notice from your employer informing you that your wages will be garnished, which might make you think that your entire paycheck will go to paying off your creditors. Fortunately both federal and Ohio laws limit both the amount of money that can be garnished and how often garnishment can occur. In addition, there are certain measures you can take to avoid wage garnishment before it happens, including filing for bankruptcy.
Wage Garnishment and Legal Protections
Wage garnishment is the legal process of deducting money from your paycheck before you are paid to pay a debt that you owe. Basically, your employer is required to withhold a portion of your earnings because a judge has determined that you owe money and have not been paying the debt.
In Ohio, the amount that a creditor can garnish from your wages is capped. Ohio law limits the garnishment amount to 25 percent of your disposable earnings – the amount that you earn each pay period once taxes have been taken out. If you pay child support, the amount that creditors can garnish from your wages is less.
In addition, Ohio law limits how often your paycheck can be garnished. Once one creditor has garnished your wages, no creditor can garnish your wages until 30 days have passed.
The types of income that can be garnished in Ohio are also limited. The following payments to you cannot be garnished:
- Workers compensation payments
- Unemployment benefits
- Disability payments
- Pensions up to $54,000
- Veterans’ benefits
- Insurance proceeds such as life or group insurance
Federal law protects you from losing your job because of wage garnishment. Nevertheless, garnishment makes life difficult on your employer due to the extra paperwork that is required. It is therefore preferable to avoid having your wages garnished, if possible.
Wage garnishment can only occur once a court has entered a judgment against you for money owed. If you receive a notice of a lawsuit or judgment, speak with an attorney right away. You might be able to negotiate a payment plan with them, avoiding garnishment.
If you cannot reach a deal with your creditor or pay off the debt in full, in Ohio, you can file a petition for an appointment of a trustee. If approved, you – not your employer – will pay a portion of your paycheck to the trustee who will then divide the portion between your creditors until the balance has been paid off. If you fail to make payments as agreed to the trustee, the arrangement is terminated and you will again be subject to wage garnishment.
If you are unable to make regular payments for your debt, bankruptcy may be a good option, if not the best one. If you receive a notice of a judgment or lawsuit against you, an experienced bankruptcy attorney can advise you about how bankruptcy will affect your particular situation and suggest the debt relief options available to you.