Wage Garnishment in Oregon

It can be difficult to make ends meet even in the best of circumstances. But when a creditor gets a wage garnishment order against you, it allows them to take money directly from your paycheck. This will reduce your take-home pay and can make it difficult to pay your bills and living expenses. 

Luckily, creditors have to follow a legal process before they can garnish your wages. They’ll also be limited in how much they can take. This article will explore how wage garnishment works in the Beaver State.

What Is Wage Garnishment? 

Wage garnishment allows creditors to take money from your paycheck to address an overdue debt. Most creditors need to get a court order to garnish your wages. They get this court order by suing you. If they win, the court grants them a judgment and they can then use debt collection tools like garnishment. Wage garnishment is primarily regulated by state law, but there are also federal limits to how much can be taken from your check.

Who Can Garnish My Wages in Oregon?

Creditors for both private and public debts may use wage garnishment as a debt collection tool in Oregon. Federal debts, like tax debts and student loans, are regulated by special federal laws. Creditors for these types of debts don’t need a judgment to garnish your wages. This is also true for those collecting on back state taxes and court-ordered child support or alimony payment. This article focuses on the wage garnishment process for private debts where a creditor is required to go to court and get a judgment before garnishing your wages.

Oregon Wage Garnishment Process 

There are several steps creditors need to follow before they can garnish your wages.

1. The creditor sues you and wins a judgment.

The wage garnishment process in Oregon will begin with a lawsuit. When a creditor sues you, you’ll receive a summons and complaint. You need to respond to this complaint and/or show up to the hearing. This allows you to tell your side of the story and raise any defenses or objections you have about the debt. If you fail to answer the lawsuit, the creditor will win by default and the court will award it a default judgment. If the creditor gets a default judgment or wins the suit and is issued a money judgment, they can then apply for a writ of garnishment. 

2. Your employer receives the writ of garnishment and other legal paperwork.

Once the creditor has applied for a writ of garnishment, paperwork will be sent to your employer. In a wage garnishment case, your employer is called the garnishee. The garnishee will receive:

• A copy of the writ of garnishment

• A garnishee response form

• An instructions to garnishee form

• A wage exemption calculation form

• Any search fee required by Oregon law

If the garnishee doesn’t receive all of these forms, the garnishment will not be effective. Also, the writ of garnishment must contain all of the following information:

(a) The name of the court whose authority is invoked;

(b) The names of the creditor and debtor;

(c) The name of the garnishor;

(d) The date on which judgment was entered against the debtor or the debt otherwise became subject to garnishment under Oregon law;

(e) The debtor's Employer Identification Number or the final four digits of the debtor's Social Security number, if those numbers are known by the garnishor;

(f) The amount subject to garnishment under the writ, as determined by completing the debt calculation form provided in Oregon statutes;

(g) The date on which the writ is issued; and

(h) All addresses required in the writ of garnishment form.

If the writ of garnishment doesn’t contain this information it’s not valid.

3. You’ll receive paperwork from the court.

Once paperwork is delivered to the garnishee, the person who delivered the writ must mail or deliver documents to you, including:

• A copy of the writ of garnishment;

• The original of the debt calculation form;

• A notice of exemptions form; and

• A challenge to garnishment form with the names and addresses of the garnishor (the creditor) and garnishee entered by the garnishor. This form includes a list of what income is exempt.

Once you receive notice of the garnishment, you have some options. If your property is the subject of the garnishment, you can claim it is not subject to garnishment. You can also claim any state or federal exemptions to protect your assets from garnishment.  If you qualify for any exemptions, you’ll need to fill out the challenge to garnishment form and return it to the court within 120 days for wage exemptions and within 30 days for property exemptions. If you 

file a challenge to garnishment, the court will hold a hearing to review your exemptions.

4. The garnishment begins.

Once the writ of garnishment has been delivered to your employer, the wage garnishment can begin. The garnishment will continue for up to 90 days or until the judgment has been fully paid, whichever comes first. After 90 days, the creditor can renew the garnishment.

How Much of My Paycheck Can Be Taken by Wage Garnishment?

A judgment creditor or garnishor cannot garnish more than the judgment plus fees, costs, and interest. Federal and state laws also limit the amount of money that may be taken out of each paycheck.

Federal law limits the total amount of money that judgment creditors can take from a single paycheck to the lesser of the following: 

• 25% of your disposable earnings for that week (what's left after mandatory deductions), or

• The amount by which your disposable earnings for that week exceed 30 times the federal minimum hourly wage. The current federal minimum wage is $7.25 and 30 times that is $217.50.

Oregon law goes further in its exemption. It protects the greater of 75% of your disposable earnings or:

• $254 per week,

• $509 per two-week period,

• $545 per half-month period, or

• $1,090 per month.

Disposable earnings are the wages you receive after legally mandated deductions are taken out, such as Social Security and payroll taxes.

In Oregon, a writ of garnishment garnishes all of your personal property, including but not limited to wages unless it falls under an exception outlined in state law. If property is being garnished and it has more than one owner, the garnishment only applies to your interest in the property.

Aksim income is protected from creditors and can’t be garnished. To qualify, this money must be readily identifiable and directly deposited into your bank account. It must also come from one or more of the following sources:

• Payments from the Social Security Administration, including SSI and SSD;

• Public assistance payments from the state or a state agency;

• Unemployment compensation payments from the state or a state agency;

• Payments from a public or private retirement plan as defined by Oregon law;

• Veterans benefit payments from the Veterans Benefits Administration;

• Workers’ compensation payments from a workers’ compensation carrier; and/or

• Black lung benefits payments from the U.S. Department of Labor. 

How To Stop a Garnishment in Oregon

The creditor will continue to garnish your wages until the debt is paid off or you take some measure to stop the garnishment, such as claiming an exemption with the court. You have legal rights, including caps on how much of your paycheck can be taken at once. And you can take steps to lessen the effects of garnishment. 

Your state's exemption laws determine the amount of income you'll be able to retain in a garnishment. Depending on your situation, you might be able to partially or fully keep your money. You can also pay the amount you owe off either through a lump-sum payment or by allowing the garnishment to continue until the debt is fully repaid. You can also try to negotiate the debt and a repayment plan with the creditor.

Another way to stop a garnishment in Oregon is by filing bankruptcy. When you file bankruptcy, the court issues an automatic stay, which stops any garnishment or other debt collection activities. You may also be able to get the debt wiped out through a bankruptcy discharge. Debts like student loans, taxes, and child support, can’t be discharged, but filing bankruptcy will postpone the garnishment. If you file Chapter 13 bankruptcy, you’ll have more flexibility to repay the debt.

Oregon’s bankruptcy exemptions will protect some of your property from creditors. Upsolve provides a free application that can help you file Chapter 7 bankruptcy without an attorney. If you would like legal advice, Upsolve can connect you with an experienced attorney that offers a free consultation.

Are There Any Resources for People Facing Wage Garnishment in Oregon?

There are several legal aid and nonprofit organizations in Oregon that can help you deal with wage garnishment, including:

• Oregon Law Center

• Oregon Legal Aid

• Oregon.gov

• Oregon Law Help

• Oregon State Bar

• State of Oregon Law Library