Garnishments to collect a debt make a huge dent in your bank account and/or paycheck. Garnishments come in two primary flavors. There is a garnishment of your bank account and there is garnishment of wages. A creditor does not have to choose one or the other. They can employ both as a means to collect a debt.
How Much Can Be Garnished From Bank Accounts?
A sneaky way creditors collect is by a bank garnishment. Most people are really caught off guard by this. By the time you received the notice of the bank garnishment it is too late. The notice you receive is the same one the bank received. The bank is ordered to freeze funds over a certain dollar amount and report to the court.
Currently in Ohio, the amount of money that can be garnished from a bank account is any amount greater than $425.00 for an individual. If this is a joint debt and joint account, the bank will freeze any amount greater than $850.00.
You will have an opportunity to come to the court and explain why this money should not be taken. But the procedure is very limited. You can only claim valid exemptions. The court is not going to listen to any other arguments.
How Much Can Be Garnish From Wages/Paychecks?
This tactic is not as covert. A wage garnishment notice is sent to you and your employer. The notice indicates the case and a formula for you to calculate the monthly amount of money to be paid. You then have the option to make the monthly payments. If you do not, then a court order will go on instructing your employer to withhold the payments.
The basic formula is 25% of your net pay after taxes. I repeat, after taxes. None of your other deductions are taken out until after the garnishment. If you have high insurance or retirement deductions, your spendable income is going to be very small. It will not be fun.
How Will You Know if a Creditor is Going to Garnish?
For most instances, a creditor is required to bring a legal proceeding to determine that the debt is owed. This is typically a lawsuit filed against you in the Common Pleas Court or the Municipal Court. If the creditor is successful and wins the case, they then have the court behind them as they attempt to collect.
With that said, the legal system requires that you be given notice of a pending legal action. The creditor and the court will make many attempts to serve you with the complaint. They will try the regular mail, certified mail, and personal service.
Don’t think you can hide and make it go away. If the above service methods are unsuccessful, they will advertise in a local paper for a period of time. When that time has passed, You Have Been Served. The case will proceed and you will lose.
Very few people are garnished without ever knowing they had a lawsuit filed against them. So, if you think that letter from the court might be a bad thing, it probably is. Contact a local bankruptcy attorney to find out what your options are. Take action now before you find out the hard way how much can be garnished in Ohio.