Debt Collection Laws in Ohio

Federal debt collection laws

The Fair Debt Collection Practices Act (FDCPA) is a federal debt collection law that affords all Americans certain rights when unpaid debts are being pursued by bill collectors. The FDCPA applies to most consumer debts, but not to business debts. It also does not apply to debts pursued by the original creditor, or to a business you owed money to.

Ultimately, the FDCPA prohibits debt collectors from using deceptive or abusive debt collection practices, such as contacting you at odd hours, calling you repeatedly or making false threats regarding legal actions they plan to take. Debt collectors are also barred from revealing the existence of unpaid debts to other parties, both on social media and through direct forms of communication.

According to the Consumer Financial Protection Bureau (CFPB), the FDCPA requires debt collectors to contact your attorney instead of reaching out to you personally if you have legal representation already in place.

Also, note that the FDCPA lets people in debt stop all contact with debt collectors by informing them in writing that they do not want to receive communications any longer. If the debt collector continues its communications, they can be sued under the FDCPA and be forced to pay for legal fees as well as damages.

» MORE: How to handle bill collectors

Ohio debt collection laws

While the FDCPA provides consumer protections that apply in all 50 states, Ohio also has its own debt collection law, the Consumer Sales Practices Act.

Both of these laws apply to most consumer and personal debts a person can have, including credit cards, auto loans, medical bills and utility bills. However, these laws do not apply to money owed to government agencies, child support or taxes. Also note that both the FDCPA and Ohio’s debt collection law apply to third-party debt collectors and debt buyers, but not to original creditors trying to collect the money they owe.

Debt collection practices

Many of the provisions in the state law duplicate protections built into the FDCPA, but they are still worth noting.

Under Ohio’s Consumer Sales Practices Act, bill collectors are prohibited from:

• Harassing you or using obscene words in their communications
• Contacting you before 8 a.m. or after 9 p.m.
• Contacting you without identifying themselves
• Telling others about your debt
• Contacting you at work if your employer disapproves
• Threatening you with arrest or jail time
• Using false names or statements
• Implying that they are attorneys, government representatives or with the credit bureaus
• Falsely representing that you have committed a crime
• Misrepresenting the amount you owe on your debt
• Communicating with you by postcard
• Contacting you personally when they know you have legal representation
• Using a telephone to harass or annoy you
• Accepting a postdated check unless certain conditions are met
• Communicating in a way that leads to financial charges (e.g., collect phone calls)

Types of debt covered and excluded

Ohio debt collection laws apply to many common forms of consumer debt, but protections can vary depending on the obligation type and who is collecting it. In general, both federal and state laws focus on personal, household and family debts.

Common debt types and how they are treated:

• Credit card debt: Covered under federal and Ohio laws. Third-party collectors must follow rules on communication and disclosures.
• Medical debt: Covered. Consumers are protected from harassment and misleading collection practices.
• Auto loans: Covered for collection activity. Separate laws govern repossession rights.
• Utility bills: Covered when sent to collections. Original providers may follow different rules.
• Payday loans: Covered, though lenders must also comply with Ohio-specific lending regulations.
• Private student loans: Covered when handled by third-party collectors.
• Federal student loans: Generally not subject to the FDCPA when collected by the government or its contractors.
• Government debts (taxes, fines): Often excluded from standard debt collection laws and handled under separate rules.

Understanding which laws apply can help you identify your rights and respond appropriately if a debt collector contacts you.

Wage garnishment laws

In Ohio, wage garnishment is a legal process that allows creditors to collect unpaid debts directly from your paycheck. Most creditors must first obtain a court judgment before garnishment can begin, as outlined in Ohio Revised Code 2716.02.

Key rules and protections include:

• Court judgment required: Creditors generally must sue you and win a judgment before requesting wage garnishment.
• Notice requirement: You must receive a written notice and have the opportunity to dispute the debt or request a hearing before garnishment starts.
• Limits on garnishment: The amount taken is limited to the lesser of 25% of your disposable earnings or the amount by which your weekly income exceeds 30 times the federal minimum wage.
• Exemptions: Certain income may be protected, including Social Security benefits, disability payments and some pensions.
• Continuous garnishment: Once approved, garnishment continues until the debt is paid or the order is lifted.
• Special debts: Child support, taxes and federal student loans may be garnished without a standard court judgment and can have higher withholding limits.

Understanding these rules can help you protect your income and respond quickly if a creditor seeks garnishment.

Statute of limitations

According to Jeremiah Heck, founding partner of Luftman, Heck & Associates in Dublin, Ohio, the state's collection statute is six years regardless of the type of debt.

"This doesn't mean your debt disappears after that, but it means a debt collector can't take legal action against you more than six years after the debt became overdue or a payment was last made," he said.

Licensing and registration

Heck said that Ohio debt collectors do not need to be licensed to operate in the state. However, bill collectors still have to comply with the FDCPA, the Fair Credit Reporting Act and state laws such as Ohio's Consumer Sales Practices Act.

Required notices and rights to dispute

Debt collectors in Ohio and in other states have to send you something called validation information within five days of their initial contact with you. This information can be sent electronically or through the regular mail, but it must include:

• Explanation that the communication is from a debt collector
• Contact information and address of the debt collector
• Name of creditor(s) you owe money to
• Account number(s) associated with the debt
• Itemization of the current amount of the debt that reflects interest, fees, payments and credits
• Current amount of the debt owed when the notice is provided
• Information on how to dispute the debt
• Notification that you have 30 days to officially dispute the debt

If you believe a debt is not yours, it's partially incorrect or you don't even recognize the debt, you have 30 days to file a formal dispute in writing. You also have the same 30-day period to request information about the original creditor.

Disputing the debt or asking for more information on the original creditor means the debt collector must pause collection efforts until they respond to you. They must provide the information you request, and send proof (or "validation") of the debt such as a copy of the original bill.

If you don't respond within the 30-day timeline, the bill collector can assume the debt is valid and continue their collection activities.

Enforcement and penalties

According to Heck, debt collectors can be held accountable in several ways if they violate the law. They could face administrative enforcement from the state attorney general and federal agencies like the Federal Trade Commission.

Heck also said that debtors can take private action to sue unlawful collectors and recover damages. In fact, consumers whose rights have been violated can sue bill collectors under both the federal FDCPA and Ohio’s Consumer Sales Practices Act within one year of when a violation occurred.

» MORE: How to get out of debt

What to do if you’re sued by a debt collector

If a debt collector files a lawsuit against you, it’s important to act quickly to protect your rights and avoid a default judgment.

• Review the summons and complaint: Carefully read the documents to understand who is suing you, the amount claimed and the deadline to respond.
• Note the deadline: In many states, you have a limited number of days to file an answer with the court. Missing this deadline can result in an automatic judgment against you.
• File a written answer: Respond to each claim in the complaint. You can admit, deny or state that you lack sufficient information. Filing an answer helps preserve your right to defend yourself.
• Check for errors: Verify that the debt amount is accurate and that the collector has the legal right to collect it.
• Seek legal help: Contact a consumer law attorney or legal aid organization. Free or low-cost assistance may be available depending on your income.
• Prepare for court or settlement: Gather documents, consider negotiating a settlement and attend all required court hearings.

Taking these steps early can improve your chances of resolving the case on fair terms.

FAQ

Bottom line

Debt collectors in Ohio must follow federal and state laws as they attempt to collect on unpaid debts, and this includes stopping contact with you if you request it in writing. If they violate your rights in any way, you can also sue them under the FDCPA or Ohio’s debt collection law and become eligible for damages and coverage for your legal bills.

That said, telling bill collectors to stop calling won't make the debts you owe go away. If you want to get out of debt and limit the consequences of nonpayment, it may be time to speak with a credit counseling agency, an attorney or another third party who can help.