If you are overwhelmed with debt and a judge rules you owe your creditors money, the creditors have the right to garnish your wages and take as much as 25 percent of your disposable earnings from each paycheck until the debt is paid.
Besides creating embarrassment for you and leaving you even shorter of money, wage garnishment has other negative effects. It creates a lot of paperwork for your employer, who now knows about your financial difficulties; and if you keep having multiple garnishments, it can even cost you your job.
What should you do if you are faced with wage garnishment? Your best bet is to seek legal advice. The skilled and seasoned Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer understand that financial problems can happen to even the most well-intentioned people. We offer a free consultation to evaluate your financial situation and develop a plan to keep your debt problems from reaching the point of aggressive collection actions such as wage garnishment.
Garnishment allows someone to take money from your wages or from your bank account regardless of outstanding checks. If there is a judgment against you, the court will send a demand letter to you requesting payment of the judgment amount. According to Ohio state law, the notice must provide you with information about options available to you to avoid wage garnishment.
If you do not respond to the demand letter, your employer will give you a notice and wage garnishment paperwork.
You must return this notice with either a payment or a calculation showing your total earnings are exempt. If you do not return it on time, the creditor can then get an order to garnish your pay. You can ask for a hearing if you disagree with the garnishment, but if the court issues a garnishment order, all your pay checks will be garnished until the amount of the judgment has been paid off or your circumstances change. In Ohio, creditors can garnish wages from every check, including bonus checks.
1) Pay Without Formal Garnishment
With your demand letter or notice, you will get a form titled “Payment to Avoid Garnishment.” If you intend to pay what you owe, you must complete the form and return it to the creditor within 15 days. You will then be able to make periodic payments without having to go through the formal garnishment process.
The payment form enables you to calculate the amount of your payments equal to 25 percent of your wages and the proportion by which your earnings exceed the federal minimum wage. Your payment will be the lesser of these amounts. Your employer must verify the earnings information and sign the form.
Once the creditor receives your form, wage garnishment proceedings stop as long as you continue to make the payments. When your debt is paid in full, the creditor must file a form with the court stating that the judgment has been satisfied.
2) Get a Trustee
Your demand letter gives you the option to file an affidavit with the court requesting the appointment of a trustee. In the affidavit, you must list the names and addresses of all your creditors, the total amount of each creditor’s claim against you, and the amount you will pay the trustee out of each paycheck. You have 15 days to file an affidavit with the nearest Municipal or Common Pleas court, which will assign a clerk as your trustee to take money out of each paycheck to give to your creditors.
Once your trustee has been appointed, you must notify your creditors, and they can no longer garnish your wages as long as you keep making your payments. Your employer doesn’t have to become involved or know that you’re having financial trouble.
3) Use a Credit Counseling Service
If you get a debt counseling service, you will be able to make payment arrangements to pay off your debt over time without having your wages garnished. The counselors will calculate a single payment that will be distributed among your creditors and help you build a budget. You will not have to involve your employer as long as you make your regular payments.
4) File for Bankruptcy
Bankruptcy is a way to eliminate many of your debts and get a fresh start financially. The most common types of bankruptcy are Chapter 7 and Chapter 13 bankruptcy.
Chapter 7 allows you to liquidate any non-exempt assets to pay creditors, and this eliminates remaining debt. Chapter 13 reorganizes your debts and sets up a payment plan monitored by the court and a trustee and allows you to keep many assets.
Be aware that there are advantages and disadvantages to filing under the various chapters, and you will still be responsible for certain debts, including child support, spousal support obligations, student loans and most unpaid taxes. However, bankruptcy can eliminate credit card debt, medical bills and unsecured loans, and stop harassment by creditors.
If you are faced with garnishment of your wages, time is of the essence. If you cannot become current in your payments or make another arrangement with your creditor, you may be able to prevent garnishment by filing for bankruptcy or taking other steps to help.
Take the first step toward debt relief by contacting the experienced and compassionate Ohio debt-relief attorneys at Fesenmyer Cousino Weinzimmer today for a FREE INITIAL CONSULTATION.
We know what you are going through. We will evaluate your entire financial picture by looking at your income, your debts and your goals, and we will discuss the best fit for your individual situation. We will handle every phase of the process and find what works best for you.
We welcome inquiries from clients throughout central and southwestern Ohio. From our law offices in Columbus, Dayton and Cincinnati, we have helped thousands of Ohio residents find new hope and prevent garnishment.
Delaying can only make your situation worse, so call the Ohio bankruptcy attorneys at Fesenmyer Cousino Weinzimmer today at one of our conveniently located office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati), or email for your free consultation.
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