So you’ve obtained a judgment for a few thousand dollars against your former tenant and you are looking to collect. My advice: don’t be in a hurry or you will be sorely disappointed. Collections are usually a long drawn out process and can take sometimes as much as two to three years to result in complete payment of the debt. Everybody wants their money yesterday but the collection process has many speed bumps to slow your pursuit of what is owed to you. I try to warn clients in advance of the lengthy collections process so that I can avoid the inevitable series of phone calls inquiring about their money but few heed my initial advice on the matter.
Obtaining the judgment is the easy part. The court awards you a judgment but the court does not aid you in collecting what is owed. The best form of collecting on a judgment is usually through a wage garnishment. A tenant must have wages to garnish so you will need to know where the tenant is currently employed in order to start a garnishment. If the tenant loses employment while your garnishment is in progress then your garnishment will end. Loss of employment means no more wages to garnish. If this happens, you will need to discover when and where the tenant next obtains gainful employment. If you are able to do so, you will have to start the garnishment process over again.
I should note that Ohio law requires a creditor to send a 15 day Notice of Court Proceeding to Collect Debt before any court collection activities (including wage garnishment) can begin. This 15 day notice needs to be sent to the last known address of the tenant. Usually the last known address is the rental unit that the tenant is no longer occupying. If the tenant did not forward his or her mail and never receives the 15 day notice then that is the tenant’s problem. The creditor is only required to send the notice to the last known address. Many tenants fail to forward their mail because they are just irresponsible or they are trying to shake creditors (including the landlord) off their trail.
I bring up the 15 day notice because it is a prerequisite to most collection activities and because it adds at least 15 days to the collection process. In the grand scheme of things, 15 days is just a drop in the bucket compared to the other delays built into the collection process. When you file for a wage garnishment, the court will process the garnishment paperwork in the normal course of business. This means that the garnishment paperwork will proceed through several departments within the court before it is finally sent to the debtor’s employer. Your collection action does not take precedence over the thousands of other cases handled by the court.
The court sends the garnishment paperwork to the debtor’s employer for verification that the debtor/former tenant is currently employed there. If the employer is a big corporation, it is not uncommon for the garnishment paperwork to get lost or misplaced. The employer could also simply choose to ignore the garnishment paperwork. I’ve even seen employers fire the employee rather than deal with the hassle of garnishment. If the employee has had more than one garnishment with that employer, it is perfectly legal in Ohio for an employer to terminate employment as a result. Why would an employer take this drastic step? Have you ever dealt with payroll taxes? Throw a garnishment order on top of that. Garnishments are a pain in the ass for employers. Why not just employ someone else who doesn’t have a court-ordered garnishment for the employer to deal with.
If the employer fails to respond, you must file a motion with the court to force them to respond. Doing so, only adds more time to the collection process. Courts often schedule such hearings several weeks or months after you have asked for one. This is probably because they have several other cases already on their docket. The employer may not even show up at the hearing. In that case, you have to ask the court to sanction the employer for failing to show up. If that happens, you get to try to collect on the employer.
Your former tenant can intervene in this process and contest the garnishment. If this happens, the court will schedule a hearing sometime in the future, and future generally does not mean tomorrow, or the following week, or, even, the following month. Your former tenant may even obtain a continuance/postponement of the first hearing. If so, the court will schedule the next hearing even further down the road. In the meantime, the court will not release any wage garnishments collected to you.
Let’s say you’ve made it to the point where the employer is actually depositing garnished wages with the court. The court will hold each payment for two weeks before it begins the process of releasing those funds to you.
Let me repeat that: THE COURT WILL HOLD EACH PAYMENT FOR TWO WEEKS BEFORE IT BEGINS THE PROCESS OF RELEASING THOSE FUNDS TO YOU.
Did you follow that? The court holds the money to make sure the employer’s check clears. Yeah, that’s right. Payroll checks do bounce from time to time. After two weeks, the court begins the PROCESS of releasing those funds to you.
Yeah, that’s right, there is a process involved in getting the money to you. This means that the money does not automatically and immediately come to you or get electronically deposited into your bank account for immediate use by you. As with almost everything involving the court system, the garnished funds and the paperwork have to pass through several court departments before a check is cut and sent via first-class regular mail.
First-class regular mail means that another government agency, the US Post Office, gets to handle your money on its own sweet schedule. Guess how many pieces of first-class mail the US Post Office handles on a daily basis? 187.8 million pieces of just first-class mail everyday. Many of you mistakenly think that the Post Office has a 100% on-time, delivery success rate. I’m hear to tell you that you are dead wrong. If the Post Office is just 1% off that equates to 1.88 million pieces of mail that are either lost or not delivered in a timely manner. Do you think the Post Office’s on-time, delivery success rate is 99%? I mean, do you?
Do your attorney a favor and don’t ring his or her phone off the hook or blow up his or her computer with emails demanding to know where your money is. Your money is on the way and your attorney does not work at the courthouse nor does your attorney work at the US Post Office. Therefore, your attorney has no control over when these government agencies decide to do their job.
Remember the debtor/former tenant can lose his or her employment at any time during the garnishment process. Don’t put it past the debtor/former tenant to quit their job just to spite you. They are under no court order to continue working to pay off their debt to you. If the debtor/former tenant is working a minimum wage job with no benefits, no health insurance, no nothing, what’s their motivation to keep that job after being garnished? In addition, a garnishment lasts for six months. So if six months expire and you still haven’t received that total amount owed, you have to file for a new garnishment. If, in the meantime, another creditor places a garnishment on the same debtor, you have to wait six months for that garnishment to expire before you can restart your garnishment.
It gets better. Under Ohio law, you can only garnish a maximum of 25% of net pay. That’s right, the government gets paid before you do. Any garnishment occurs on the amount after applicable withholding taxes have been, wait for it, withheld.
They may even file for bankruptcy to spite you and prevent you from continuing to garnish their wages. If they file for bankruptcy, then the gig is up. No more garnishments and the bankruptcy court will most likely discharge the debt owed to you which means the debt is no longer legally owed to you. You cannot prevent the debtor/former tenant from filing bankruptcy.
So if you are getting ready to garnish a debtor/former tenant or are in the process of garnishment, sit back, relax and enjoy the ride. It’s going to be a long one.