Ohio Collection Laws

What are Ohio's collection laws, and what rights do creditors and debtors have in Ohio?

I have debt in Ohio, and I was told that Ohio has consumer protection laws that are not good for people. Exactly what rights do I have?

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Highlights


  • Ohio allows debtors to set up a payment plan to avoid garnishment.
  • Ohio's statute of limitations on credit card debt is not settled.
  • Deficiency balances may be collected in Ohio.

A collection agent or law firm that owns a collection account is a creditor. A creditor has several legal means of collecting a debt. But before the creditor can start, the creditor must go to court to receive a judgment. See the Bills.com resource Served Summons and Complaint to learn more about this process.

The court may decide to grant a judgment to the creditor. A judgment is a declaration by a court that the creditor has the legal right to demand a wage garnishment, a levy on the debtor's bank accounts, and a lien on the debtor's property. A creditor that is granted a judgment is called a "judgment-creditor." Which of these tools the creditor will use depends on the circumstances. We discuss each of these remedies below.

Ohio Wage Garnishment

The most common method used by judgment-creditors to enforce judgments is wage garnishment. A judgment-creditor contacts your employer and requires the employer to deduct a certain portion of your wages each pay period and send the money to the creditor.

n most states, creditors may garnish between 10% and 25% of your wages, with the percentage allowed determined by state law. Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law, but may be allowed for child support. See the Bills.com Wage Garnishment article to learn more.

In Ohio, wage garnishment is allowed under O.R.C. § 2716.07. If the judgment-creditor is aware of the debtor's place of employment, it may seek wage garnishment. Under Ohio law, the garnishment applies to 25% of the debtor's net take home pay, (i.e., gross pay less statutorily mandated deductions). Garnishment can occur only after the person being garnished has received a 10-day's notice.

However, under Ohio law, you also may contact a budget and debt counseling service described in division (D) of O.R.C. § 2716.03 for the purpose of entering into an agreement for debt scheduling. There may not be enough time to set up an agreement for debt scheduling to avoid a garnishment of your wages based upon this demand for payment, but entering into an agreement for debt scheduling might protect you from future garnishments of your wages. Under an agreement for debt scheduling, you will have to regularly pay a portion of your income to the service until the debts subject to the agreement are paid off. This portion of your income will be paid by the service to your creditors who are owed debts subject to the agreement. This can be to your advantage because these creditors cannot garnish your wages while you make your payments to the service on time.

Levy Bank Accounts In Ohio

A levy means that the creditor has the right to take whatever money in a debtor's account and apply the funds to the balance of the judgment. Again, the procedure for levying bank accounts, as well as what amount, if any, a debtor can claim as exempt from the levy, is governed by state law. Many states exempt certain amounts and certain types of funds from bank levies, so a debtor should review his or her state's laws to find if a bank account can be levied. Some states call levy attachment or garnishment.

In Ohio, levy is allowed under O.R.C. § 1304.80. As used in this section, "creditor process" means levy, attachment, garnishment, notice of lien, sequestration, or similar process issued by or on behalf of a creditor or other claimant with respect to an account. Under O.R.C. § 2329.66, $425 is exempt from account garnishment.

This applies to creditor process with respect to an authorized account of the sender of a payment order if the creditor process is served on the receiving bank. For the purpose of determining rights regarding the creditor process, if the receiving bank accepts the payment order, the balance in the authorized account is deemed to be reduced by the amount of the payment order to the extent the bank did not otherwise receive payment of the order, unless the creditor process is served at a time and in a manner affording the bank a reasonable opportunity to act on it before the bank accepts the payment order.

If you reside in another state, see the Bills.com Account Levy resource to learn more about the general rules for this remedy.

Ohio Lien

A lien is an encumbrance -- a claim -- on a property. For example, if the debtor owns a home, a creditor with a judgment has the right to place a lien on the home, meaning that if the debtor sells or refinances the home, the debtor will be required to pay the judgment out of the proceeds of the sale or refinance. If the amount of the judgment is more than the amount of equity in your home, then the lien may prevent the debtor from selling or refinancing until the debtor can pay off the judgment.

Under Ohio law, property liens are an allowable method available to a creditor for payment of debtor obligations. Please see O.R.C. § 118.20, Authorizing Debt Obligations, for a discussion on property liens. See also the reader comments below for a discussion on liens and foreclosure.

If you reside in another state, see the Bills.com Liens & How to Resolve Them article to learn more.

Ohio Statute of Limitations

Each state has its own statute of limitations. Ohio has the most creditor-friendly statutes of limitations in the country. According to O.R.C. § 2305.07 Contract not in writing, and O.R.C. § 2305.06, the statute of limitations for an oral contract is 6 years, a written contract is 8 years. Effective September 28, 2012, the statute of limitations decreased from 15 years to 8 years from the point when the statute of limitations clock starts.

When it comes to credit card accounts, some courts apply Ohio's "open account" statute of limitations, which is 6 years (O.R.C. § 2305.07). Other Ohio courts use the written contracts rule, which is 15 years for actions accruing before Sept. 28, 2012, and 8 years for actions accruing after Sept 28, 2012 (O.R.C. § 2305.06 as per SB 224). Others use Ohio's Retail Installment Sales Act, which sets the limit at 4 years (O.R.C. § 1302.98 and O.R.C. § 1317.01). This means that when a local court chooses a credit card statute of limitations, instead of relying on binding precedent from higher level courts (called stare decisis in the legal field), judges seem to apply the rule argued most persuasively by the two parties.

The Ohio Bar Association published a document indicating in passing the statute of limitations for Ohio credit card debt is 6 years, although this is not authoritative or a document one could cite to a court.

A judgment from an Ohio court is valid for 5 years, and then becomes dormant unless revived by the judgment-creditor (O.R.C. § 2329.07). Once dormant, the judgment-creditor has 10 years to revive an Ohio judgment (O.R.C. § 2325.18(A)). Ohio gives non-Ohio judgments full faith and credit after the foreign judgment is filed in an Ohio state court. Once filed, the time-limit rules for foreign judgments are the same as Ohio judgments (O.R.C. § 2329.021 through 2329.027).

The statute of limitations for recovering a deficiency balance relating to a mortgage foreclosure is 2 years, according to O.R.C. § 2329.08.

The statute of limitations for a promissory note is 6 years after the due date, or if accelerated, within 6 years after the accelerated due date (O.R.C. § 1303.16).

ollection agents violate the FDCPA if they file a debt collection lawsuit against a consumer after the statute of limitation expired (Kimber v. Federal Financial Corp. 668 F.Supp. 1480 (1987) and Basile v. Blatt, Hasenmiller, Liebsker & Moore LLC, 632 F. Supp. 2d 842, 845 (2009)). Unscrupulous collection agents sue in hopes the consumer will not know this rule.

When does a statute of limitations clock start? Most states start the statute of limitations after the cause of action accrues. For debt-related issues, this usually means when you miss your first payment. See the Bills.com statute of limitations article to learn more about statutes of limitations.

Ohio Statutes of Limitations & Other State’s Statutes of Limitations

Ohio enacted a “borrowing statute” where if the default was prior to April 7, 2005, no cause of action that accrued in another state may be maintained in Ohio if the statute of limitations expired in the other state. This is important in lawsuits where creditors base the statute of limitations on a written contract that expressly designates its terms are governed by non-Ohio state law (O.R.C. § 2305.03(B)).

See the Bills.com resource Collection Laws and the Statute of Limitations for the rules in other states.

Ohio Post-Judgment Interest

If Ohio courts cannot find a post-judgment interest rate in the contract between the parties, they will use the statutory interest rate, which varies. Ohio Revised Code Chapter 1343 sets the statutory limitations to the interest that may accrue on written instruments and judgments. The Ohio judgment interest rate varies, and is set according to O.R.C. § 5703.47. The interest rate used for Ohio judgments, in cases where the rate is not set in the contract between the parties, is also the interest rate used for delinquent Ohio taxes. The Ohio tax commissioner publishes the Ohio Annual Certified Interest Rates.

The parties must make the calculation using simple interest on judgments unless there is a specific agreement or statutory provision requiring the payment of compound interest (Mayer v. Medancic, 124 Ohio St.3d 101, 2009-Ohio-6190).

Ohio Foreclosure Law

Ohio foreclosure laws are found in O.R.C. § 323.28. To learn more about the rules surrounding foreclosure in this state, including deficiency balances, please see O.R.C. § 5721.192. If the proceeds from a sale of a parcel under O.R.C. § 5721.19 or O.R.C. § 5723.06 are insufficient to pay in full the amount of the taxes, assessments, charges, penalties, and interest which are due and unpaid; the costs incurred in the foreclosure proceeding, the foreclosure and forfeiture proceeding, or both foreclosure and forfeiture proceedings which are due and unpaid; and, if division (B)(1) or (2) of O.R.C. § 5721.17 is applicable, any notes issued by a receiver pursuant to division (F) of O.R.C. § 3767.41 and any receiver's lien as defined in division (C)(4) of O.R.C. § 5721.18, the court may enter a deficiency judgment for the unpaid amount as authorized by O.R.C. § 5721.17, O.R.C. § 5721.19, O.R.C. § 5723.05, and O.R.C. § 5723.18.

Ohio Spousal Debt Liability

Ohio is not a community property state, so the general rule is one spouse not liable for the other spouse's separate debt, with the exception of medical debt.

Ohio follows the doctrine of necessaries for medical debt. In Ohio, the marriage contract creates mutual obligations of support, and the duty extends to both spouses (Ohio State Univ. Hosp. v. Kinkaid, 549 N.E.2d 517). Ohio courts and statutes establish liability for the medical debts of a debtor spouse when the debtor spouse is unable to pay the debt, to the extent the other spouse is able.

Recommendation

If you receive an Ohio summons for a consumer debt, read the Ohio Bar Association's Responding to a Debt Collection Lawsuit. Then consult with an Ohio attorney experienced in civil litigation to get precise answers to your questions about liens, levies, and garnishment in Ohio.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

74 Comments

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  • 35x35
    Mar, 2013
    Matthew
    I received notification from an area court that a collection agency is attempting to collect an alleged debt from a state university from 1999 and 2002. In the documents the attorney filed with the court, all they provided as validity of debt were account print outs from the university. They haven't provided any written contract bearing my signature. My question is this: doesn't the plaintiff have to prove that I signed a contract agreeing to pay? Also, wouldn't alleged debts from 1999 and 2002 fall outside of the SOL in Ohio? I sent an answer both to the court and the attorney alleging that they cannot prove validity of the debt because they have no written contract with my signature. And since they cannot provide this, do they have any case at all?
    0 Votes

    • 35x35
      Mar, 2013
      Bill
      In general, you are correct — the defendant can challenge the existence of a contract between the parties. If the court determines there was no contract, the plaintiff has no case and the court will dismiss the case. How a defendant accomplishes this defense is the key.

      Consult with a lawyer in your state of residence who has civil litigation experience before you file any other answers with the court or communicate to the plaintiff.

      Regarding Ohio's statute of limitations, this changed recently. The new rule is the statute of limitations for Ohio contracts is 15 years for actions accrued before Sept. 28, 2012, and 8 years for actions accruing after that date (see Ohio Revised Code 2305.06 for details). Consult with a lawyer in your state to learn which Ohio statute of limitations applies to you. I believe it is the 15-year rule, but a lawyer can analyze your situation in person and in greater depth.
      0 Votes

  • 35x35
    Feb, 2013
    Helen
    If there is a foreclosure judgment against you in Ohio, but is not recorded against the property, does the five years/dormant ORC apply here?
    0 Votes

    • 35x35
      Feb, 2013
      Bill
      I do not have enough information to answer your question accurately.

      If you are asking, "Following a foreclosure in Ohio, does the lender (now a judgment-creditor due to a successful action filed against the borrower) need to perfect its judgment before can collect?" Yes, if it wishes to use the judgment to seize the judgment-debtor's personal property, such a vehicle. An Ohio judgment-creditor must give the judgment-debtor a 45-day notice before it can start garnishing wages.

      If you are asking, "What is the statute of limitations for an Ohio judgment? A judgment from an Ohio court is valid for 5 years, and then becomes dormant unless revived by the judgment-creditor. See Ohio Revised Code 2329.07 to learn specifics about this rule.

      If you are asking, "Does a non-perfected judgment follow ORC 2329.07 or have a different statute of limitations?" I do not see a separate rule for unperfected judgments, nor do I see in the ORC any mention of perfection starting the statute of limitations clock, or tolling for unperfected judgments. I hasten to add I am not an Ohio lawyer, and know nothing about Ohio's case law here. Therefore, your wisest course of action is to consult with an Ohio lawyer who has consumer law or bankruptcy experience.
      0 Votes

  • 35x35
    Nov, 2012
    Ramonda
    In Ohio, the ORC 2305.06, the statute of limitations on written contracts is now 8 years, effective 09/28/12, and was previously 15 years. I have a debt from a mobile home that my ex husband took possession of and was to take responsibility for in 1998, per our divorce decree. The trailer was repossessed in 2001, I believe. Has the SOL expired on this debt since ORC 2305.06 has changed? A third party collector tried to contact me.
    0 Votes

    • 35x35
      Nov, 2012
      Bill
      The state of Ohio’s Web site containing Ohio statutes published the following for Ohio Revised Code 2305.06:
      2305.06 [Effective 9/28/2012] Contract in writing

      Except as provided in sections 126.301 and 1302.98 of the Revised Code, an action upon a specialty or an agreement, contract, or promise in writing shall be brought within eight years after the cause of action accrued.

      R.C. § 2305.06
      Amended by 129th General Assembly File No. 135, SB 224, § 1, eff. 9/28/2012.
      When this statute of limitations applies is unclear from the statute alone. SB 224 is the law the Ohio legislature passed to change 2305.06. When we look back at SB 224, the intent of the Ohio legislature is clear. We find the following two sections in SB 224:
      SECTION 3. Subject to Section 4 of this act, section 2305.06 of the Revised Code, as amended by this act, applies to actions in which the cause of action accrues on or after the effective date of this act.

      SECTION 4. For causes of action that are governed by section 2305.06 of the Revised Code and accrued prior to the effective date of this act, the period of limitations shall be eight years from the effective date of this act or the expiration of the period of limitations in effect prior to the effective date of this act, whichever occurs first.
      Section 3 and 4 are not law, and it is unclear to me why the drafters of SB 224 did not include this language in 2305.06. However, when a court tries to interpret a law, they almost always research to find the legislative intent of the law. A low-level Ohio trial judge is free to ignore the two sections just quoted from SB 224, but he or she skates on thin ice by doing so. A higher-level appellate judge facing at a 2305.06 question will probably look to the legislative intent and SB 224 for guidance.

      What does this mean to you? It is likely an Ohio court will apply a 15-year statute of limitations for a breach of contract dispute on an action that occurred before September 28, 2012. In this context, an “action” is the date of first delinquency, which in your case occurred during or before 2001.
      0 Votes

  • 35x35
    Sep, 2012
    K
    Your article is not quite correct regarding the Statute of Limitations for collecting a deficiency balance from a foreclosure suit. You reference ORC 2305.04 as pertaining to the SOL for collecting a deficiency balance. In fact, that section only applies to recovering "title or possesion" of the property. (The SOL being 21 years after default occurs) If the home was ever used as the borrower's residence, a lender must take action to collect on a deficiency judgment within 2 years from the confirmation of sale date. (See ORC 2329.08)
    0 Votes

  • 35x35
    Sep, 2012
    Rebecca
    Capital One just won a judgement against me for 1000.00 with 3% interest. I have no job, I own my car, live in public housing, receive a medical card, food stamps, and 200.00 a month in child support. I just got married and my husband only makes 260.00 every two weeks to support 4 people. Can the debt collectors attorneys take my son's child support or my husbands wages? He has a separate bank account. Also can they take my car since I have owned it for years?
    0 Votes

    • 35x35
      Sep, 2012
      Bill
      Because you wrote your comment on a page discussing Ohio law, I will assume you are an Ohio resident. Wage garnishment law is set by federal law, but states are allowed to tighten the federal guidelines. In Ohio, no one may have more than 25% garnished from their wages (after deductions required by law). Any sum above 25% is protected from garnishment. That's the federal ceiling. There's also a federal wage garnishment floor Ohio follows, too. A wage earner is permitted to take home 30 times the federal minimum wage (after deductions required by law). This amount is protected from garnishment.

      The federal minimum wage as I write these words in mid-2012 is $7.70. A weekly wage of $7.70 x 30 hours is $231. If your weekly take-home pay (after deductions) is $231 or less, your wages up to $231 are exempt and may not be garnished. What is a permitted deduction? Taxes, but not voluntary contributions to a savings or retirement plan.

      Let us say your weekly wages are $500 after deductions. The amount that can be garnished is 25%, or $125. Ohio judges are not permitted to take into consideration the number of dependents, loss in family income, medical condition or medical bills, or divorce and order an amount less than what the law allows.

      You mentioned a vehicle. A debtor may exempt a motor vehicle up to $3,225 in value from creditors (Ohio 2329.66). If your vehicle market value is at or less than that amount, you need not worry about a judgment-creditor asking the sheriff to seize the vehicle.

      You mentioned child support. Child or spousal support is not a wage, and is therefore not subject to wage garnishment. However, if the support amount is considered beyond what is necessary to support the child or former spouse, a court has the option to allow a garnishment.
      0 Votes

  • 35x35
    Jul, 2012
    Rhonda
    My husband a notice about a late student loan. Come to find out it's his daughter's loan that he NEVER co-signed. We are very upset. When talking to the lender, we mentioned this had to be "fraud". They are sending us paper work for fraud, however, they will NOT send us a copy of the application we supposedly signed. Is there really a law that they can't send out paperwork if we mention "fraud"? I do recall his daughter asking me for our financial information a few years back stating the on-line app required it. I asked her if she was sure this is not part of a co-signer. She assured me it was not.
    1. Why can't they send us a copy of the signed application?
    2. Even if a daughter accidentally put us as a co-signer, doesn't the lender have to send us papers to sign?
    0 Votes

    • 35x35
      Jul, 2012
      Bill
      My guess, note that word choice, is the loan is private and not federal. Given the behavior of some private student lenders, it is certainly within the realm of possibility the borrower completed the form not realizing she "signed" an electronic form as your representative or proxy. The fact the lender will not provide you a copy of the original with the signature is telling, in my opinion. On to your questions:
      1. The lender may send anyone a copy of the contract, if it so chooses. For reasons it will not disclose, it does not want you to see a copy of the contract. Unfortunately, this leaves you to speculate why it does not, and what the contract does and does not contain. If the lender's argument is the contract is confidential and may seen only by the parties who signed it, then if it claims you are a co-signer, then you should be able to see a copy.
      2. On the other hand, the lender is not required to send you or anyone else a copy of the contract unless it receives a subpena to do so.

      My advice? Consult with a lawyer who has consumer law experience. Ask him or her to send the lender a letter asking for evidence you signed the loan contract in question. If it sends you a copy, show it to your lawyer and discuss your option. In the meantime, do not assume you have liability for the debt based only on the lender's spoken claim you do.

      0 Votes

  • 35x35
    Jul, 2012
    Lori
    My husband just finished a garnishment of a total of $1,454.77 due to one of those buy here pay here car dealerships. The final garnishment came out on the 20th of this month and today the 23rd of July, we receive a bill from this collection agency wanting another $634.86. We have already gave $500 to a bankruptcy attorney but there is nothing he can do until we pay him the full amount of $1,306 in order to file the bankruptcy. This current bill from this collection agency says nothing in regards to why we should have to pay this amount? Do I ignore it and hope we come up with the money to file bankruptcy or do I make the payments of $100 like they want although I can't afford that amount per month at this time?
    0 Votes

    • 35x35
      Jul, 2012
      Bill
      Is "this collection agency" related to the buy-here-pay-here garnishment? If so, reply with a letter indicating the court-ordered wage garnishment is satisfied, and that you owe no more under that judgment.

      If "this collection agency" wishes to collect on a separate debt, send it a debt validation letter immediately according to the instructions on the page I just mentioned. Do not ignore this collection attempt.
      0 Votes

  • 35x35
    Jun, 2012
    Jen
    Question - My husband & I were sued by a daycare in Ohio with whom we tried numerous times to work with, as when they found out that the military childcare subsidy we had received for 18 months was underpaid and we the parents were due a nearly $6,000 credit for our overpayments BUT the credit could only be paid to the daycare who would in turn have to cut us a check if we requested the credit be refunded. We went from having a hand written ledger from the daycare showing we owed $600.00 to a new spreadsheet every week for 3 weeks until they finally stated we owed then $5,700.00 ($3,000 they claimed was from 2 years prior even though the original payment ledger showed no prior balances but credits held over from year to year) We turned down the credit payment and found a new daycare - However they sued us for $6,500.00 - We thought we had all the proof we needed and they even admitted in court that they had no record of past due statements etc. - Well somehow we lost, we got out procedured. The week after the "trial" My husband sent a notice to the court and to the plantiff's attorney letting them know that he had military orders and the Army was PCS (moving us) from Cincinnati to Miami Fl and we only had 60 days in which to move - he sited the service member relief act and requested no motions or ruling be filed until after his report date. - So we got the ruling which the court sat on for 8 business days before mailing and they mailed to our old address - by the time we got it, we were 1 day outside the appeal date - We have an attorney who is former JAG trying to sort this out but according to him, this area court is notorious for not following the rules. Apparently a garnishment order was issued which our attorney never got notice of, nor did we - They are garnishing 25% of my pay and we are hurting since we have not been able to sell our home in Ohio and were already close to being foreclosed on. My husband and I were never residents of Ohio (Missouri is his home of record and mine), I took Florida residency upon moving here which was before the judgement. How can the Ohio area county court collect on this judgement? They have not sought to domesticate the judgement in FL nor MO. Oh and by the way the court has yet to make any ruling on 2 motions our attorney filed 4 months ago (asking for new trial since the transcript shows that the plantiffs attorney admits he never responded to our discovery requests and the judge tells hime he should have known better but it was on us for not filing a motion to force him to). According to my payroll company they don't check to see what state laws should be followed (nice) so what is my recourse since they have already gobbled up $2,800 and we are now going to food banks (4 kids). Any thoughts would be great
    0 Votes

    • 35x35
      Jun, 2012
      Bill
      The facts in your case are distressing. Continue to work with your lawyer on your case.
      0 Votes

  • 35x35
    Apr, 2012
    Joseph
    If you receive a 15-day letter which is notice of garnishment which allows you to submit 25% of your net income per check to avoid your employer receiving garnishment request. If you're paying the company and you get a second 15 day letter from another company on a different debt is there anything you can do other than letting them send it to employer or paying them another 25%? I don't know if i can tell the two creditors that they have to split it. If you have more than one garnishment an employer can fire you without recourse. Really don't know what to do here. The 25% is not bad but the first company would not take a lower payment to avoid sending to employer. Also, how long after they send a 15-day letter do they usually take to file a garnishment with a employer?
    0 Votes

    • 35x35
      Apr, 2012
      Bill
      You are in a difficult situation. Does your employer have a history of terminating employee who have more than one wage garnishment? Or, has your employer stated a policy indicating it will fire people with more than one garnishment?

      I assume your creditors are consumer-debt creditors, and not the government. One idea: Allow the garnishments. Creditor No. 1 will receive funds until the garnishment expires or the debt is paid. This will block Creditor No. 2 from garnishing your wages until the first garnishment concludes.

      Consult with a lawyer in your state who has consumer law experience to learn more about your rights and liabilities.
      0 Votes

    • 35x35
      Apr, 2012
      Joseph
      The whole issue is we are trying to avoid the employer receiving the garnishment request. and I know it is law they can not fir you for garnishment but more than one garnishment in a year you can be terminated without any recourse.....as it is not the employers problem to go thru all the paperwork. So my issue is how to stall them atleast a month going to file chater 7... but if employer finds out job could be gone cause they could probably find another reason in todays economy especialy......since the 15 day letters require you to pay or they submit a garnishment i dont know what to do..... have looked into motion for slow pay and also getting a trustee who divides payment amongst creditors But it is all so vague and does not tell if it stops them from submitting garnishment to employer
      0 Votes

  • 35x35
    Apr, 2012
    Tanya
    A lawsuit in Ohio had been filed for a cc debt. The debtor was never served and the lawsuit was eventually dismissed for lack of service/prosecution. Although a lawsuit tolls the sol, I read somewhere else that if the lawsuit was dismissed, it is like it never happened, so the sol was, in actuality, not tolled. Is this true?
    0 Votes

    • 35x35
      Apr, 2012
      Bill
      What you described, if true for Ohio, would be another piece of evidence showing the Ohio courts and/or legislature have tipped the tables in favor of creditors.

      What you described is not a rule for all states. I do not know if Ohio has the rule you described. Consult with an Ohio lawyer who has consumer law experience to learn the answer to your question. When you learn your answer, please return here an explain what you learned.
      0 Votes

  • 35x35
    Apr, 2012
    alex
    I had a charge off account from wells fargo in 2009 in Ohio. Can the bank charge interest after the account was closed. Can a collector charge interest and or fees in addition to the original amount?
    0 Votes

    • 35x35
      Apr, 2012
      Bill
      Yes, original creditors and collection agents may charge interest on accounts that are closed and charged-off. Keep in mind that charge-off is an accounting term. A creditor changing an account's status to charge-off does not mean the account may not be collected. Follow the link just mentioned to learn more.
      0 Votes

  • 35x35
    Mar, 2012
    William
    On 03/19/2010 the lender for the 1st mortgage foreclosed on my primary residence in California (single family residence). I was recently contacted by a collection agency from Arizona asking for the balance of the 2nd mortgage (HELOC) - approximately $126k (The HELOC lender sold them the note.) Within the terms of the original note for the HELOC it specifies that the "Laws of Ohio" govern. After reviewing your website, I noticed that there is a 2 year time limit for the lender/collection agency to seek a deficiency judgement in Ohio. To date, I have not been served or summoned for any court proceeding...is it possible that they can obtain a deficiency judgement in 11 days (2 years from date of foreclosure)? Am I safe from wage garnishment?
    1 Votes

    • 35x35
      Mar, 2012
      Bill
      William, consult with a lawyer in your state of residence regarding your questions. The key issue here is not wage garnishment, but potential liability for the $126K deficiency balance.

      Statutes of limitations rules are tricky, and I commend you for taking the time to read your HELOC contract. As you mentioned, Ohio law may apply here, but if you still reside in California, I think you can make a strong argument that California Civil § 580 is a better law to apply. I say that for four reasons:
      1. The HELOC was secured by California property.
      2. You probably signed the HELOC contract when you were a California resident.
      3. I infer you are a California resident now.
      4. The action to recover the deficiency balance is based on a California foreclosure.

      If you are successful with that argument, then 580's three-month statute of limitations for bringing an action to recover a deficiency balance applies.

      As I discuss in the Bills.com article Which Statute of Limitations Applies to You, answering these questions is very difficult. As I mentioned at the start of this comment, consult with a lawyer who can review all of your evidence and give you a tailored answer.

      0 Votes

  • 35x35
    Mar, 2012
    Brian
    I am helping a neighbor who has some college debt she hired an attorney to reach a settlement and did so. After this settlement the creditor went through the IRS and got her tax return. Is this legal for them even after a court settlement was reached?
    0 Votes

    • 35x35
      Mar, 2012
      Bill
      I cannot answer your question without knowing more about the terms and conditions of the settlement contract between your neighbor and the collection agent or lender. Your neighbor should return to the lawyer and ask him or her if the tax refund offset is allowed by the settlement.
      0 Votes

  • 35x35
    Feb, 2012
    Beverly
    I had an accident back in 2001 a judgement was put against me in an Ohio Court in 2003. I attempted to make good on this judgement and they said that I did not make enough money to pay on the debt. They at no point garnished wages from me. I today Feb. 2012 just received a letter in an attempt to collect the debt from an attorney. Are they allowed to do so since they have not contacted me in so long?
    0 Votes

    • 35x35
      Feb, 2012
      Bill
      In a word, yes. There is no laches (estoppel in equity by delay) issue for judgments that I know of.
      0 Votes

  • 35x35
    Dec, 2011
    Casey
    My husband defaulted on a debt with Discover well over 7 years ago. A judgement was filed 10/2005 and now we are trying to buy a house and because of the judgement we are running into an issue. We are pretty sure that we paid it off in 2007, but did so with a credit card that we no longer have and cannot find a statement of proof. To add to it the company we believe we paid it to is no longer in business. I read something about how in Ohio a debt over 5 years becomes dormant - not sure if or what that does for us since it is still showing on his credit report. Any advice on how to get that cleared from the court and in a timely manner?
    0 Votes

    • 35x35
      Dec, 2011
      Bill
      A judgment from an Ohio court is valid for 5 years, and then becomes dormant unless revived by the judgment-creditor. However, I understand that your problem is not with the creditor. A judgement will stay on your account for 10 years.

      You are in a tough position, as mortgage lenders are going to require that judgments be satisfied before approving your loan application. I don't know what you can do beside trying to provide a letter of explanation (LOX) to the lender's underwriter. It may or may not be accepted, but your LOX should detail, to the best of your knowledge, how you paid the debt, to whom you paid it to satisfy the judgment, and how the company you paid is out of business.

      You can't change what is done, but your situation illustrates the importance of keeping accurate and comprehensive financial records long term.
      0 Votes

  • 35x35
    Nov, 2011
    Rae
    I filed bankruptcy in 1999. On my credit report, I am showing that I have a judgment lien from a credit card in the same year. After multiple calls to the courts, the credit card company, everyone is suggesting to leave it alone because it is "dormant". I am looking to purchase a house. Will this pose a problem?
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      Under FCRA § 605 (2) [15 U.S.C. 1681c], "Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period." (emphasis added). The statute of limitations for a judgment in Ohio is 5 years (Ohio R.C. 2329.07), but can be revived.

      You mentioned the judgment occurred in 1999. Given what I just wrote above, the judgment should not appear on your credit report, and should have been removed in 2006. Dispute this derogatory on your credit report.
      0 Votes

  • 35x35
    Nov, 2011
    alexis
    We won a judgement against my dad's ex wife but she never paid. How long after the judgement do we have to pursue her?
    0 Votes

    • 35x35
      Nov, 2011
      Bill
      In Ohio, a judgment from an Ohio court is valid for 5 years, and then becomes dormant unless revived by the judgment-creditor.

      You indicated you reside in Oklahoma, which has different rules. If the judgment-debtor is an Oklahoma resident, the judgment statute of limitations is 5 years. See the Bills.com resource Oklahoma Statutes of Limitations to learn more.
      0 Votes

  • 35x35
    Oct, 2011
    Amy
    In the last year I have stopped paying 4 credit cards I own on because I was out of work for a while due to being a kidney donor. I still can not make the payments. How long before the negative "non pay"/charge offs will be removed from my credit report?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      Derogatory items can appear on a consumer's credit report for 7½ years from the date of first delinquency. See the Bills.com resource Fair Credit Reporting Act for a discussion of consumers' rights and liabilities under the FCRA.
      0 Votes

  • 35x35
    Oct, 2011
    robert
    i have to go to court for a unpaid city income tax. and i want to know what to expect because i have no property except for a old car worth about 1,000.00
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      I can't give you legal advice, as only an attorney can properly do so, but I will give a non-legal opinion.

      I think that you will be compelled to set up a payment plan and that any expected tax refunds may be diverted to repay the debt. I don't believe that your car will be at risk.
      0 Votes

  • 35x35
    Oct, 2011
    Sheila
    Can a creditor that has a levy against your bank talk to anyone besides the me in reference to my personal information? Including a spouse if they are not listed as a party in the garnishment/bank levy or as a judgement debtor? And if they do so, can the creditor use that information against me? Have they violated any privacy laws in doing so? If that information was considerably damaging to my account status and am I responsible for whatever my spouse may have done or told them that they have done? Such as closing their joint banking account to keep it from being garnished. What if anything can the creditor do with this information, since they were not given my express, nor was I asked for permission for them to talk to my spouse? If I had no prior knowledge of my spouse closing my bank account or removing my name after the garnishment has been issued, can this be held against me? And if so, what can they do to me?
    0 Votes

    • 35x35
      Oct, 2011
      Bill
      I understand you ask your questions in hypothetical form, but the details matter in formulating an answer. In general, a collection agent has the right under the FDCPA to ask anyone of the debtor's acquaintance how to reach the debtor or judgment debtor. The collection agent may not reveal anything other than that, and certainly may not harass the acquaintance. If, during the course of the conversation, the acquaintance reveals other information, such as the debtor's bank or credit union, then I know of no prohibition in the FDCPA or other law that prohibits the debtor from acting on that information.

      Consult with a lawyer in your state who has consumer law experience to learn if there are any privacy laws offered by your state that concern the privacy breach you allude to in your message.

      Family members and acquaintances are not required to speak to a collection agent, nor are they required to reveal what, if anything, they know about the debtor's finances.
      0 Votes

  • 35x35
    Oct, 2011
    janet
    Hi, I have hit some hard times, have fought to pay my past due credit cards, but still have judgements against me on a few that are biting me. My wages are being garnished at 25%. I am already paying over 400 dollars a month that I cannot afford on credit card debt. Today, I rec'd notice of intent to garnish my bank account on a different acct the credit card company has a judgement against me for. My question: is there a total limit to what % they can garnish, combined wage and bank acct? i know that the total wage garnishment is 25%, and the garnishments can stack up. Can the bank acct be garnished at the same time? If so, how do i feed my kids? I am trying to pay these guys back, but come on...
    1 Votes

    • 35x35
      Oct, 2011
      Bill
      Unfortunately, your bank account can be levied at the same time and by the same creditor, if your state's laws allow it. Ohio state law does permit bank levies, though $400 of your account is exempt from attachment (and more would be, if the source of your funds in your account were exempt from garnishment).

      I recommend that you speak with a bankruptcy attorney. Even if you don't qualify for a Chapter 7 BK, which would discharge your debts, a Chapter 13 would stop the garnishments and potentially set up a reasonable repayment plan with your creditors. It is worth investigating. Other than that, anyone who has a judgment should try to keep funds in a bank account below the level that can be garnished, using cash and money order to pay bills.
      0 Votes

  • 35x35
    Sep, 2011
    Angela
    I live in Oh. How long after a judgement is issued does it take for them to start collection via bank levy? Also do they have to inform you when that happens?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      In theory, a wage garnishment, account levy, or lien can occur immediately. In some states, the judgment-creditor must give the judgment-debtor notice of the pending action. However, do not rely on the judgment-creditor doing so.

      You mentioned Ohio. Consult with an Ohio lawyer who has experience in consumer law to learn more about your rights in your situation.
      0 Votes

  • 35x35
    Sep, 2011
    fedup
    I have a credit card where they keep raising the minium balance due even though I am not making any more purchaces and I am making extra payments on my account, I am ready to just stop paying this card because I feel like I am being ripped off. I live in Ohio my source of income is SSI, what recourse will the credit card company have?
    0 Votes

    • 35x35
      Sep, 2011
      Bill
      The Credit CARD Act of 2009 prevents credit card issuers from raising interest rates, or changing payment dates unfairly, but I see nothing in this change to the Truth in Lending Act that outlaws the increase of minimum payments.
      0 Votes

  • 35x35
    Aug, 2011
    Annie
    I received a notice of wage garnishment from Weltman Weinbrg and Reis for a past due credit card. I filled out all the proper documents and sent in a payment to avoid garnishment. They received the payment and documents before the deadline to execute the garnishment. But a few days later I saw that they levied my bank account. The next payment date hadn't even passed yet. Are they allowed to do that?
    0 Votes

    • 35x35
      Aug, 2011
      Bill
      The notice may have only applied to your wages, not your bank account. You will have to consult with an attorney to see if your WW&R broke the law or not.
      0 Votes

  • 35x35
    Jul, 2011
    Athena
    I had a voluntary repo done on a car that someone else was paying for but was in my name because they quit paying on it. There was only a year left on the loan (which originally was for $30,000 but was paid down to $10,000). After they sold it at auction it left a deficiency balance of $2700. I am a stay at home mom and am wondering what recourse the company can take to recover this amount from me.
    0 Votes

    • 35x35
      Jul, 2011
      Bill
      If the company sues you and gets a judgment, then it can take the action outlined in the article where you left your comment: garnish wages, levy bank account, and file a lien. If you have no current income, your bank account is the prime target.
      0 Votes

    • 35x35
      Jul, 2011
      Athena
      I purchased and was financed for this vehicle in New Mexico but then moved to Ohio so which state's statute of limitations will they have to follow?
      0 Votes

    • 35x35
      Jul, 2011
      Bill
      See the Bills.com resource Statute of Limitations for a discussion of this issue.
      0 Votes

  • 35x35
    Jul, 2011
    Lori
    I live in Pa, but I visited a chiropractor in Ohio. I paid the amount that my insurance allowed and was told that was the amount they would accpt for payment, with the exception of one procedure. After almost 2 years I received a bill for the enitre amount. I sent them my dispute and a check for the procedure. They sent my check back and are demanding payment. They stated that they were sending it to collection if I did not respond by June 10, 2011. They sent me another statement on July 5, so they have not sent it yet. My questions are Do I follow Pa law where I live or Ohio law where it occured. Can I take legal action for a false threat to send to collections.
    0 Votes

    • 35x35
      Jul, 2011
      Bill
      Insurance questions are difficult for a third party like me to answer because I never have enough information about your situation. Take your health insurance policy, the contract you signed with the service provider, and any resulting correspondence regarding the unpaid debt to a lawyer in your state. He or she will review these documents and advise you accordingly.
      0 Votes

  • 35x35
    May, 2011
    Stan
    I got a bill in the mail on 05-17-2011. claiming that i owe a credit card from 2001, in the amount of $1900.00. I don't recall even having a card then???? Is there a STATUE OF LIMITATION FOR BILL COLLECTORS. I am not addmitting to having this card, like I said I never had this card. PLEASE RESPOND WITH LIMITATION INFO. THANK YOU STAN Z. CLEVELAND, OHIO
    0 Votes

    • 35x35
      May, 2011
      Bill
      In all jurisdictions but Wisconsin, a creditor may attempt to collect a debt that is past the debtor's statute of limitations.

      If you do not remember the debt or credit card, chances are the debt is either not yours or a figment of an unscrupulous person's imagination. Read the Bills.com resource Fake Debt Collector to learn more about this phenomenon, and what you can do about it.
      0 Votes

    • 35x35
      Jun, 2011
      Joyce
      I live in Ohio and just recieved a phone message from Nelson & Herish lawyer stating that she has an investigation concerning me. I read their web page and think it is regarding a pay day loan from 10 - 12 years ago. I can't afford a lawyer, is there a statue of limitations on this debt? My ex husband put all the bills in my name and now I am figthing to get my credit back up for 15 years. i don't need this now. Thanks for your help.
      0 Votes

    • 35x35
      Jun, 2011
      Bill
      Reread the Statute of Limitations section in the original answer above for a discussion of Ohio's laws in this area. Consult with an Ohio lawyer to learn if the contract you signed fits under Ohio's 4-year or 15-year statute of limitations. If you cannot afford a lawyer, call your county bar association and ask for the name of the organization in your area that provides no-cost legal services to people in your area who have no or low income. Make an appointment with that organization, and bring all of the documents and information you have regarding the debt to your meeting. A lawyer you meet will advise you accordingly.

      I realize this is not a satisfying answer. However, unless and until Ohio's legislature and governor settle the statutes of limitation in Ohio, your question will continue to be a difficult one.
      0 Votes

  • 35x35
    May, 2011
    Tiffany
    my husband and i just found out that he is getting sued for an overdraft bank account that was closed three years ago.. they said that he is could go to jail over this or have his wages garnished.. we are just trying to find out if they can take him to jail over this? Cause the place they sent the mail to we have not lived there since 2006 and never has had anything sent to us
    0 Votes

    • 35x35
      May, 2011
      Bill
      I would be stunned to learn that a routine bank overdraft would be considered a criminal act. Or put another way, I would be very surprised a district attorney would give the time of day to a creditor who insisted on pressing criminal charges for an overdraft bank account.

      That said, I can imagine circumstances where a criminal mastermind would concoct a check-kiting scheme that would defraud several banks tens or hundreds of thousands of dollars. In that case, the clear intent of the check-writer is to commit a crime.

      Unless your spouse is a Bernard Madoff wannabe and intended to overdraw his account a large amount, it is far more likely that his case, should it get that far, would be tried in a civil court.
      0 Votes

  • 35x35
    Apr, 2011
    binda
    Hi. After a medical emergency, and resultant prolonged period of unemployment some yrs ago, I unfortunately wracked up quite a few debts. In now trying to sort them out and regain financial composure, I find very little listed on my current credit reports. What happens to debts hanging out there in the air in Ohio, once you can't even find them on the CRs? Are they lurking still? Also, my bank account was attached 6 yrs ago with a judgment for 3600.00, but as i was unable to work at the time, I left the account empty. What is my best tack now? Should I contact the original collections atty and ask to settle? Will they have added interest? The judgment itself is scheduled to go off of my credit report in just a few months. What happens then, can they re-institute it again? I am afraid if I try to pay it now, they will hand over a larger bill, and re-institute the negative on my CR. Thx for advice on best approach!
    0 Votes

    • 35x35
      Apr, 2011
      Bill
      The cliche "Let sleeping dogs lie," comes to mind when I read your questions about the debts that no longer appear on your credit report.

      Regarding the judgment, it is possible to renew judgments in most states when the statute of limitations on it expires. Note that the statute of limitations on a debt or judgment is found in state law, and has no connection whatsoever with how long a judgment or derogatory entry can appear on a credit report. Credit reports are controlled by federal law. I have no statistics on how frequently judgments are renewed.
      0 Votes

  • 35x35
    Apr, 2011
    Mary
    I have been paying on my husbands hospital bill, six thousand dollars, (and some smaller bills of my own) every month for the last year. I had an agreement with the financial counselor at the hospital in which she had told me she didn't care even if it was ten dollars a month as long as I made a payment it wouldn't go to collections. In February my account supposedly came up for review and someone else in their financial dept. sent me a letter regarding the account that I did not realize was sent. I thought all the statements I had recieved were logging the payments I had made and didn't bother to open up the mail from the hospital. Since I didn't respond the other person in their financial dept. decided I wasn't paying enough on the account per month so they sent it to "soft collections". Can the hospital legally get away with sending my account to a collections agency when I had been paying on my bill every month per an agreement with their own financial counselor? Can you advise as to whom I should speak to within the hospital administration to discuss this? This financial counselor I had been dealing with for over a year told me there was nothing she could do about having it taken out of "soft" collections. I'm nervous about this being in a collection agencys' hands because with Ohio credit laws if somebody decides I'm not paying enough a month they can probably take me to court and end up garnishing my husbands wages even though I'm making payments each and every month in the first place.
    0 Votes

    • 35x35
      Apr, 2011
      Bill
      I see the key issue in facts you shared is the promise the financial counselor made to you regarding your continuing to make payments and it not sending your account to a collections agent. In law, this is known as "the gratuitous promise" issue. We all know what a promise is: "Jimmy, you rake the leaves in my front yard today and I'll give you $5." If Jimmy does a good job raking, you are obligated to give the kid $5. A gratuitous promise is one that's unenforceable legally. For example, if you say, "Jimmy, rake my leaves and I'll give you $5," and he says, "I'll do it tomorrow," and you later in the day contract with Tommy to rake the leaves, which he does immediately, you do not owe Jimmy $5.

      They question is, was the hospital's promise to not send your account to collection gratuitous, or was there consideration (payment)? You would argue the promise was not gratuitous. They promised that if you paid something, they would not send you to collections. You paid continuously, and the amount totaled $6,000. The hospital would argue that you were obligated to pay the bill regardless of its promise to not send the bill to collections, and that therefore the promise to not send the bill to collections was empty — a gratuitous promise.

      I do not have a yes or no answer to the question of whether the hospital's promise was gratuitous. That is a question for an Ohio judge to answer, and I suggest you consult with an Ohio lawyer who has experience litigating contracts to get a more precise analysis of your facts.
      0 Votes

  • 35x35
    Mar, 2011
    rex
    I have a question, In Ohio when you receive your judgment, and the CC creditors find out you are unemployed, can they then place a lien on your home and then have the judge for a sale? Also can the creditors get a judgment to take personal items from your home, and what or how much could I keep? One other thing how can you protect your car from being seized as well? I'm going to need it for work, and it's quite old, might not be worth $1K anymore.
    0 Votes

    • 35x35
      Mar, 2011
      Bill
      Rex: My answer may seem redundant, but what I wrote to Angie applies to your situation as well: As I read Ohio statutes, yes, a lienholder may foreclose (Ohio Revised Code 2329) subject to the exemptions found in Ohio Revise Code 2329.66. Consult with an Ohio lawyer to learn what options you have to resolve the judgment that avoids a lien. If you cannot afford a lawyer, call your county bar association and ask for the name of the local organization that provides no-cost legal services to people in your area who have low or no income. Make an appointment with that organization and bring all of the documents you have regarding the debt to your meeting. The attorney you meet will review your documents, and advise you according to Ohio law.
      0 Votes

  • 35x35
    Mar, 2011
    Angie
    I was recently served a judement against me and currently do not work, I am a student. My mother dies 2 years ago and my home as well as 4 other properties were transfered upon death to me and my brother. The amount is 9,300.00. Can they force me to forclose on anything in the state of Ohio to retrieve this debt?
    0 Votes

    • 35x35
      Mar, 2011
      Bill
      As I read Ohio statutes, yes, a lienholder may foreclose (Ohio Revised Code 2329) subject to the exemptions found in Ohio Revise Code 2329.66. Consult with an Ohio lawyer to learn what options you have to resolve the judgment that avoids a lien.
      0 Votes

  • 35x35
    Feb, 2011
    Rob
    I live in Ohio. I had an unpaid bill to an attorney 11 years ago. I recently found there is a tax lien on my credit report from the attorney. I contacted them and was told they are entitled to ten percent interest plus the original amount owed. Do I have to pay it and do I have to pay the interest?
    0 Votes

    • 35x35
      Feb, 2011
      Bill
      Regarding the rate of interest on an Ohio judgment, Ohio 1343.03 Rate not stipulated and 5703.47 apply. In Ohio, the interest that can be charged on a judgment is the "'federal short-term rate' means the rate of the average market yield on outstanding marketable obligations of the United States with remaining periods to maturity of three years or less, as determined under section 1274 of the Internal Revenue Code of 1986, 100 Stat. 2085, 26 U.S.C.A. 1274, for July of the current year." I read 5703.47 to mean that the rate that can be charged varies each year, and at present the short-term rate is approximately 0.5%.

      Whether it was legal for the lawyer to place a tax lien on your property is not a question I am competent to answer. Consult with a lawyer in Ohio who has experience in consumer law. He or she will review the lien documents in person, and advise you accordingly.
      0 Votes

  • 35x35
    Feb, 2011
    Marie
    If I have an unpaid gas bill from 2001, and am receiving notices from a collection agency, what is the statue of limitations for this? Does it fall under the 6 year or 15 year? If it falls under the 6 year, what steps should I take to stop the collection notices?
    0 Votes

    • 35x35
      Feb, 2011
      Bill
      Ohio's statute of limitations laws are unclear on this matter. Consult with a Ohio lawyer who has civil litigation experience.
      0 Votes

  • 35x35
    Dec, 2010
    Stephanie
    Can an attorney continue to sue you if you've already paid the creditor? I paid my debt directly to my creditor in Jan 2006 and now the attorney that they'd gotten is trying to sue me.
    0 Votes

    • 35x35
      Dec, 2010
      Bill
      If you paid the debt, then you cannot be successfully sued. Do you have proof of your payment? If so, show it to the attorney that contacted you. What kind of debt was it? If you can't prove you paid it already, make sure to check out the time remaining for the debt to be collected under your state's statute of limitations. The length of time varies from state to state. Creditors only have a certain time limit to collect on a debt. Once the time has passed, the debt is no longer collectible. If you make a payment of a single penny, however, you can re-start the clock on the statute of limitations.
      0 Votes