Understanding your rights and options when faced with garnishment

If you fall behind on your bills, one of the tools that your creditors have to compel you to pay is wage garnishment. Wage garnishment is an order from the court directing your employer to set aside a percentage of your wages for the benefit of the creditors you owe.

As with the majority of court orders, wage garnishment is something that cannot happen without you knowing about it first. In most cases, your creditor must first sue you in court and win a judgment against you before they may ask the court to allow garnishment of your wages. However, in cases of delinquent taxes, child support or student loans, garnishment may begin without a lawsuit. Since garnishment is preceded by a lawsuit in the vast majority of instances, you will have plenty of notice and opportunity to act.

Ohio law does not allow creditors to take your entire paycheck when garnishing your wages. Under the law, creditors may only obtain a maximum of 25 percent of your net take home pay. This is what is left over after taxes and other necessary deductions have been taken out. If you are currently paying child support, creditors may take even less.

In most cases, your paycheck is the target of garnishment attempts. However, creditors may also seek to garnish your bank account as well. Under Ohio law, the proceeds of certain assets cannot be garnished. These assets include:

• Unemployment compensation

• Workers' compensation benefits

• Veterans' benefits

• Disability benefits

• Insurance proceeds

• Up to $50,000 of pensions

• Social Security benefits

What you can do if you face garnishment

Since you will have advance notice of any garnishment attempts, you will have time to take steps to avoid the process completely. You may be able to do this by contacting your creditor to work out a payment arrangement. However, this tactic is not always successful because the creditor is under no obligation to work with you, even if you offer reasonable terms.

If this is the case, your best option is likely bankruptcy, if you cannot afford to pay the debt you owe. As soon as you file bankruptcy, all of your creditors must stop contacting you and attempting to collect outstanding debts. This means that garnishment is immediately stopped as well. When you have completed the process of bankruptcy, most of the debts you owed before you filed (including those subject to garnishment) are eliminated, giving you a fresh start.

However, since bankruptcy is not always the best solution for everyone facing garnishment, it is important to get legal advice before proceeding. The experienced bankruptcy attorneys at Minnillo & Jenkins, CO. LPA can consider your unique circumstances and recommend the best way to get yourself out of your difficult financial situation.