When a creditor obtains a judgment against a debtor for an amount owed, the creditor has a variety of means to collect. One of the most common ways a creditor cancollect on a judgmentis by garnishment. In Ohio, there are two forms of garnishment–personal earnings (wage garnishment) and garnishment of property, which includes bank accounts. The bank account liens and garnishment process is governed byO.R.C. §2316.01and certain funds are exempt under state and federal law.
What is Bank Garnishment?
Under §2316.01(b), a creditor who obtains a judgment against another person maygarnish the property, other than personal earnings (i.e. non-wage), of the person against whom judgment was obtained if:
- The property is in possession of someone other than the person against who judgment was obtained (i.e. a bank) and
- Occurs through a proceeding in garnishment in accordance with Ohio law.
Simply put, a bank garnishment is a type of non-wage garnishment that allows the money from a debtor’s bank account to be made available to the creditor through the court.
Bank Garnishment Process
To begin the bank garnishment process, the creditor must file for a proceeding in garnishment of property with the appropriate court. The court will then issue an order of garnishment to the bank, which is referred to as an attachment. Bank attachments are a one-time event and the funds in the account will usually be frozen until the attachment proceeds are released to the court for processing.
The bank must then answer whether the funds sought are available and pay the proper amount of funds to the court. The debtor has a short time period to request a hearing if they believe any of the funds are exempt from garnishment. The hearing is only to argue that exemptions apply, not to object to the judgment itself.
Unlike the wage garnishment process, the creditor does not have to notify the debtor before filing for bank garnishment. This is to prevent the debtor from having the opportunity to move funds before the garnishment takes place.
Exemptions to Bank Garnishment
Except for any exempt funds, the creditor can take the full amount of money in the debtor’s bank account up to what is necessary to satisfy the judgment. Ohio and federal law provide for certain exemptions to garnishment. Those include, but are not limited to:
- An automatic $400 exemption applies to a debtor’s bank account, so only funds in excess of that amount may be garnished.
- Social security benefits
- Workers’ compensation benefits
- Unemployment compensation
- Disability payments
- Certain pension payments
- Cash payments under the Ohio Works First program
- Veteran’s benefits
- Child support or spousal support payments
Apart from the automatic $400 cash exemption, the debtor must request a hearing to prove that funds are exempt from garnishment.
