Oregon Wage Garnishment Laws

Wage garnishment is a remedy available to creditors: it is when a creditor has the legal right to have part of the debtor's wages or salary sent to the creditor, to satisfy a legally recognized debt. It is available for any debt, including debts to the government (e.g. taxes), domestic support debts (e.g. alimony and child support), debts resulting from breach of a contract, debts resulting from a lawsuit in tort (e.g. car accidents, construction defects, slip and fall), consumer debts (e.g. credit cards and sale of goods), or debts resulting from professional services (e.g. debts for medical care, or to engineers, architects, lawyers, and accountants).

Garnishment generally is when money belonging or owed to a debtor, which is in the control of a third party, is ordered turned over to the creditor for its debt. Wage garnishment is one of the most common types, since it targets the money owed to a debtor by his or her employee (called the "garnishee") for working.

Other than a tax authority, like the IRS, a creditor typically needs a court judgment legally establishing the debt. This means that the creditor first has to sue the debtor and win, before it can seek garnishment.

Oregon Garnishment Exemptions and Non-Exemptions

Federal law provides that Social Security may only be garnished for child support, alimony, and certain federal debts, especially taxes.

Oregon, in common with other states, has carved out a number of other exemptions—types or sources of income that, to a greater or lesser extent, are also protected from garnishment. Note that wages and salary are not among them—wage and salary income is typically among the least protected sources of income. These exemptions break down into several categories

  • Pensions: there are exemptions in place for income from both public and private pensions and retirement benefits; a debtor who is (or will soon) be drawing income from these sources should check with an attorney to see whether and how much is protected.
  • Public benefits or assistance: many of the most important or common kinds enjoy an element of protection form garnishment, such as: workers' compensation; unemployment benefits; aid to the blind, disabled, or elderly; crime victim compensation; general assistance; vocational rehabilitation; medical assistance; and crime victims compensation.

Oregon, in fact, protects more types of public benefits or assistance than most states.

  • Insurance benefits or annuities: there is protection for many life insurance proceeds, for health and disability benefits, for annuity contracts, and for fraternal society benefits. Some of these benefits are only protected up to a certain dollar amount per month.
  • Alimony and child support: amounts actually needed for support are protected.

Oregon Maximum Threshold

In Oregon the lesser of the following may be garnished:

  • 25% total of disposable income—i.e. up to 25% of ALL non-exempt income, after FICA and any other legally mandated (though not including employer mandated) deductions from payroll are taken out
  • The amount by which a debtor's weekly income exceeds 30 times the minimum wage

In this, Oregon follows federal law on the subject. Note, though, that under federal law, that 25% ceiling is for most debts. For tax debts and child support, more can be garnished—up to (for child support) 60% of a debtor's income.

Oregon Statute of Limitations

Before garnishing, a creditor must sue the debtor on the debt or claim and win, establishing a legal right to the payments by obtaining a court judgment in its favor. This means that the creditor must first bring a lawsuit within the statute of limitations, or time to sue, for that kind of debt. For common consumer debts, the relevant statute of limitation is usually 6 years: contracts (written and oral), open accounts (credit cards), and promissory notes.

After obtaining its judgment, the creditor has another 10 years to enforce the judgment, such as by garnishing the debtor's wages.

Writ of Garnishment in Oregon

The order for garnishment is called a writ of garnishment. It is something a creditor applies in writing to a court for. In the application, the creditor cites the judgment which has already obtained, and states that it believes both (1) that garnishment is necessary to enforce the judgment; and (2) that a garnishee (such as the debtor's employer) has money belonging to or owed to the debtor (such as the debtor's salary or wages) which can be applied to pay the debt.

Assuming the judgment was granted properly—e.g. that all the proper legal procedures were followed previously, and the debtor had a chance to dispute the debt—the debtor has little direct role or involvement in garnishment: it is primarily between the creditor and the garnishee, since the debtor has already had a day in court. (If there was some flaw or error in how the judgment was granted, or in how the creditor is seeking garnishment, the debtor would have grounds to fight it.)

The garnishee will be required to verify that it has some of debtor's money. If it does, then in most cases, the writ of garnishment will be enforced and the garnishee will be directed to turn over a portion of that money for the creditor's benefit.

More on Stopping Wage Garnishment in Oregon

Getting Legal Help

How can a lawyer help if faced with garnishment? The lawyer can help the debtor—

  • Challenge the underlying judgment, if it was rendered or granted improperly
  • Challenge the garnishment, if there is a factual error (such as the wrong person being garnished!) or procedural error in it
  • Show that the debtor's disposable income, and therefore the amount that can garnished, is lower than thought—perhaps because much of the debtor's income is from exempt sources; this can be a powerful strategy for many retirees, for example

There is no need to simply accept garnishment. When faced with garnishment, consult with an attorney to see what is possible.

For more information:

Oregon Statutes[http://www.leg.state.or.us/ors/]

FAQ sheet about Federal garnishment rules[http://www.dol.gov/whd/regs/compliance/whdfs30.pdf]

Social security and garnishment[http://www.ssa.gov/deposit/DDFAQ898.htm]

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