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By Tonya Sams
What happens when you don’t earn enough money to pay your debts, but creditors start coming after your limited financial resources? Unfortunately, it is common for creditors to garnish your wages to get paid back.
Wage garnishment allows creditors to receive payments for a debt owed by taking money directly from a person’s paycheck. Money can also be taken directly from a person’s bank account. This type of debt compensation is called a “non-wage garnishment” or an “attachment.” This is only allowed if there is more than $500 in the debtor’s account and at least $500 is left after the garnishment— creditors are not allowed to completely wipe out someone’s bank account.
But can creditors garnish wages without telling people? Absolutely not. Creditors must file a lawsuit against the debtor and win. Once the creditor has won the settlement, they can ask the court to order a wage garnishment against the debtor. The court will then notify the employer to withhold wages to pay off the debt owed. Employers cannot fire debtors because of garnishments from one creditor within a 12-month period. However, if a second garnishment occurs during that same twelve-month period, the protections are lifted and the employer can terminate the employee for this reason (or for any other lawful reason).
To begin the process of collecting garnished wages, a creditor must send a letter to the debtor called a “Notice of Court Proceeding to Collect Debt.” It is also commonly called a “15-day letter” because the debtor has 15 days from the date the letter is sent to prevent the garnishment before it starts. Debtors can also request that the court schedule a hearing if they think their wages are not supposed to be garnished.
During this period, the debtor can either try to prevent garnishment by settling with the creditor or pay the amount owed by sending a completed “Payment to Avoid Garnishment” form along with the requested payment. The debtor can also apply to appoint a trustee through the local municipal or county court. If approved, the trustee would then be responsible for paying back the creditor. Debtors must notify creditors if they apply for this provision. A debtor can also try a debt counseling service to help pay off the debt, or file for bankruptcy.
Ohio law prevents creditors from garnishing more than 25% of a person’s disposable wages, or the amount of a person’s disposable wages minus 30 times the federal minimum wage (whichever is less). Disposable earnings are earnings during each pay period after taxes and any other mandatory deductions are taken out of a paycheck.
This might sound confusing, but essentially it means that if you are bringing home less than $217.50 a week your wages cannot be garnished (based on the federal minimum wage of $7.25/hour). However, if your take-home pay is between $217.50 and $290 per week, a creditor can garnish an amount that brings you down to that $217.50 limit. And if you bring home more than $290 per week, the creditor can take the full 25% as a garnishment.
Finally, under federal law, the amount that can be garnished for child support is up to 50-60% of someone’s disposable wages, depending on whether the spouse or child is associated with a court order.
More information is available in Legal Aid’s “Wage Garnishment” brochure, which can be found at lasclev.org/wagegarnishment.
Legal Aid may be able to help you if you are facing wage garnishments. Call 888-817-3777 or visit lasclev.org/contact for more information.
Tonya Sams is the Development and Communications Assistant at The Legal Aid Society of Cleveland.
