Wage garnishment laws differ by state

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question for the CreditCards.com expert

Dear To Her Credit,
My husband and I have credit accounts together. I recently received a phone call stating that a firm is trying to serve me with a summons; I am guessing for a credit civil matter, but I am not sure.

About seven months ago, we relocated back to Ohio, after being in Texas for a little over four years. I got my driver's license back in Ohio. My husband still has his Texas license.

Can a creditor sue me and not sue him, even though both of our names are on an account? Would they consider my legal residence Ohio while his would still be in Texas per the license situation? I had heard that wage garnishments are not legal in Texas. In addition, I am the only one with employment at this time.

Your assistance is appreciated.  -- LaShonda

Answer for the CreditCards.com expert

Dear LaShonda,
If you're the person with income, you're the one the creditors will come after. I assume you have joint accounts since you state that you have credit accounts together. You are both responsible for the debts on joint accounts. According to Florida attorney Teisha Powell, "The creditor can sue both. Or the debtor can sue one. Because the husband is unemployed, there is nothing to garnish." But since you are employed, your wages might be garnished.

State law governs whether the debtor's wages can be garnished and by how much, and those laws vary widely. "For example, Florida limits the garnishment to up to 25 percent of the debtor's wages," says Powell. "And that is only if the debtor's wages meet a minimum threshold."

You're correct -- Texas' state constitution bars garnishment by creditors. It makes an exception for child support, alimony, taxes and student loans. Ohio, on the other hand, does allow garnishment of up to 25 percent of your wages. That's 25 percent of your take-home pay, after all your taxes are deducted.

You are also protected from any garnishment if your wages are low. Ohio law limits your garnishment to the difference between your weekly take-home pay and current federal minimum wages (currently $7.25 per hour) times 30, or $217.50 ($7.25 X 30). If your weekly take-home pay is $217.50 or less, a creditor cannot garnish any of your pay.

Garnishment laws aren't the only laws that are different in Texas and Ohio. Texas has community property laws, which say that assets and debts accumulated during the marriage belong to both partners. Even if your name had not been on your husband's credit card account in Texas, the credit card company could pursue you for the debt.

Ohio, on the other hand, is a common law (separate property) state. Unless you are on the account, creditors cannot pursue you to pay your husband's debts incurred while you live in Ohio. You might want to consider closing your joint accounts with your husband, at least while you are going through financially challenging times. That way, you won't be pursued for any other new debts for his spending.

Never avoid a debt. The worst thing you can do is ignore a summons. Make sure you understand what it is for, and don't be afraid to challenge it if anything about it isn't right.

If the debt is correct, make sure that they don't garnish more than they are allowed to under Ohio law.

The bigger issue is to deal with this debt, and any other debt you and your husband have, and get the two of you back on the road to financial well-being. Depending on the size of your debt and your resources, you may consider debt negotiation or even bankruptcy if you don't see any other way to pay off the debts.

The fact that your husband hasn't changed his license yet doesn't have anything to do with the creditor pursuing you for this debt. Creditors are not notified when your license is changed. If he's living and banking in Ohio, and receiving mail there, he's a resident of Ohio. Putting off getting a new license doesn't change that. In fact, he should get a new license as soon as possible -- before he has a traffic stop and finds himself in more trouble.

See related: Steps to contest, end wage garnishment, Will bankruptcy stop wage garnishment?

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Updated: 01-16-2019