What Are The State of Ohio's Regulations on Wage Garnishment?

Ohio laws and regulations permit creditors to garnish wages of debtors that stop making payments on debt. Wage garnishment is a legal debt enforcement process where a creditor gets a court to order a debtor's employer to set aside some of the employee debtor's wages and pay them to the creditor to help satisfy a delinquent debt. Ohio laws and regulations place limits on this process. Wage garnishment is not unlimited.

Purpose

• Wage garnishment is an extremely effective method for debt collection. Once the order goes into place, employers withhold the money the same way they withhold health insurance premiums and taxes. Wage garnishment removes the option of not paying from the debtor. However, while the process may be effective for creditors, it often has a devastating effect on an already struggling consumer. Consumers who have their wages garnished are usually already experiencing financial trouble and wage garnishment decreases their income, making it more difficult to pay other bills.

Consumer Credit Protection Act

• Garnishment regulations in Ohio are impacted by federal law. The Consumer Credit Protection Act (CCPA) sets forth federal laws regulating wage garnishment. States are free to pass laws providing stricter protections for borrowers. However, the CCPA sets forth the minimum requirements for protecting borrowers. Ohio follows the CCPA, which sets different limits for the percentage of wages that a creditor can garnish depending on what type of debt is owed.

Private Creditors

• For most creditors (private financial institutions and other private lenders), the CCPA only allows a creditor in Ohio to garnish up to 25 percent of a debtor's disposable income. Disposable income is basically take-home pay after taxes and other deductions. If a debtor earns the minimum wage, then 30 times the minimum wage is exempt from garnishment. Private creditors cannot garnish in excess of these limits. Private creditors must also go through a judicial process to garnish wages.

Government Agencies

• The rules and regulations in Ohio are different for local, state and federal taxes. Tax collectors, like the Internal Revenue Service (IRS) and the Ohio Department of Taxation, can garnish wages through an administrative process where they provide the delinquent taxpayer notice and an opportunity for a hearing before they can garnish wages without a court order. In addition, the Department of Education can garnish wages without getting a court order in a similar manner for defaulted federal student loans.

Child Support

• Noncustodial parents who owe child support may also have their wages garnished. Custodial parents may request wage garnishment to collect back child support and can get up to 60 percent of the noncustodial parent's income.

Warning

• Contact a qualified attorney licensed to practice law in Ohio to find out what rights and obligations you may have with regard to Ohio wage garnishment regulations.