The Court Says I Won: Now, How Do I Collect?
Q: I just won a judgment in court against one of my customers. How do I collect the money owed to me?
A: The most effective way to collect on a judgment is to file for garnishment.
Q: What is a garnishment?
A: A garnishment is a document filed in court to get bank monies or wages held by a third party to satisfy a judgment. The two types are non-wage garnishments and wage garnishments. Ohio law allows up to 25 percent of an individual’s wages to be collected in order to pay a creditor.
Q: What is a non-wage garnishment?
A: A non-wage garnishment, usually a bank garnishment, is filed to allow money from a debtor’s bank account to be paid through the court to a creditor. If the funds are not exempt, a creditor can take the full amount of money in the account up to the amount of the judgment.
Changes to the law that became effective on Sept. 30, 2008, provide an additional protection for consumers in non-wage garnishments. Under previous law, the garnishee (usually a bank) would turn over all funds in the account to the court, and the debtor had to request a hearing to show that some or all of the funds withheld were exempt. The new law automatically applies the $400 exemption to any funds in a debtor's account so that only funds in excess of the $400 exemption amount can be garnished. A debtor who believes that funds over $400 are also exempt still can ask for a hearing using a request form provided by the court where the garnishment was filed. For example, funds totaling more than $400 from unemployment compensation or disability benefits that were deposited in the debtor’s bank account might be exempt.
Q: What is a wage garnishment?
A: A wage garnishment is filed to require an employer to deduct a certain percentage of the money a debtor earns from employment in order to pay a creditor through the court. In each pay period, the employer must pay the court a portion (up to 25 percent) of the debtor’s income earned after standard deductions are taken. For example, if an individual is paid weekly, the employer must deduct 25 percent of the employee’s weekly earnings. Employers generally incorporate garnishment orders into their regular payroll processes and forward the garnishment payment directly to the court. The court, in turn, pays the creditor.
Q: Must I notify the debtor before filing for a wage garnishment?
A: Yes. To begin the process, you must first mail a “notice of court proceeding to collect debt” to let the debtor know you will file for garnishment in 15 days. This notice need only be mailed by certified mail or certificate of mailing, and you do not have to get proof of service. You must not file the garnishment until the 15 days have expired. Once you have mailed the notice, you must begin the garnishment proceeding within 45 days of the mailing. If the garnishment does not start within that 45-day period, you will need to mail the debtor another 15-day notice to start the process again. If, however, you intend to file a bank garnishment, you do not have to notify the debtor, since a debtor may be likely to move the money if he or she believes a garnishment is imminent.
Q: What is a respondent?
A: The respondent is the third party who receives the garnishment order from the court and is ordered to respond. An employer is the respondent when wages are garnished, and a bank is generally the respondent on a bank garnishment. The respondent must answer the court’s garnishment order by sending the appropriate amount of money or a report to the court. This report from the court tells the creditor if the garnishment has been successful.
Q: If a respondent does not respond to a garnishment order, what can a creditor do?
A: The law says a plaintiff can ask the court to proceed against a garnishee for contempt. Therefore, if the respondent (employer or bank) fails to respond to a garnishment order, the creditor may file a subpoena requiring the respondent to appear in court with records and an explanation. Often, a respondent will give an answer that should have been provided in the first place. A respondent who does not answer the subpoena will have failed to honor a garnishment and may be sued for the amount of the judgment against the debtor.
Q: How long does a garnishment last?
A: Ohio wage garnishments are continuous orders. This means that a garnishment remains in effect until the judgment is paid, or the respondent receives another garnishment against the same debtor, or the respondent receives a garnishment of higher priority (e.g., a tax levy, a child support order, or an order from a jurisdiction with higher authority). A wage garnishment usually lasts for six months or until the judgment is paid.
This “Law You Can Use” column was provided by the Ohio State Bar Association. It was prepared by attorney Hal Burke of the Toledo firm, Scheer Green & Burke Co. LPA, and updated by Rachel Mulchaey of the Columbus office of Bricker & Eckler LLP.