Consumer Debt and the Garnishment of Property in Ohio

We recently discussed the importance of seeking legal advice from a Hamilton County bankruptcy law attorney when creditors resort to wage garnishment to collect a consumer debt. Another form of debt collection procedure authorized by Ohio law that can be equally harmful to a debtor is the garnishment of property other than earnings or wages.

Consumers who fall upon hard times because of unemployment or unexpected illness or injury risk more than just creditor harassment and abusive debt collection tactics. A person to whom money is owed may file a lawsuit against the debtor. If he or she is successful, the court will award the creditor a judgment for the amount that is owed.

Armed with the judgment, a creditor may commence a proceeding asking an Ohio court to order that property of the debtor in the possession of a third party be used to satisfy the debt. For example, a property garnishment may be used to seize money that you have on deposit in a checking or savings account at a bank.

The law exempts the first $400 of your personal property from being seized. So, if you have $600 in the bank, a creditor could obtain an order directing that $200 of it be applied to repay a judgment. Other debtor property that is exempt from a property garnishment includes:

  • Benefits received from workers’ compensation
  • Unemployment benefits
  • Money received from state programs such as the works first program
  • Disability payments from the state department of job and family services
  • Social Security payments
  • Benefits received by veterans from the federal government

There other state and federal benefit programs that may be exempt from garnishment to satisfy a consumer debt. An attorney would be the best source of information and legal advice for a consumer who is the target of debt collection efforts.